Mitsubishi UFJ Financial Group Inc. will buy a UBS Group AG unit that provides services to alternative investment funds for as much as 30 billion yen ($244 million) to expand its administration business.
The purchase will more than double Mitsubishi UFJ Trust & Banking Corp.’s assets under administration to $260 billion, Yasufumi Tominaga, a Tokyo-based spokesman for the unit of Japan’s biggest bank, said by phone on Friday. It will take on 300 employees of the UBS unit, he said.
Japan’s biggest banks are expanding abroad and increasing their focus on fee businesses as low interest rates hamper lending income at home. Mitsubishi UFJ’s acquisition of UBS’s Alternative Fund Services group would add to the two global fund-administration firms it bought for 31 billion yen in 2013 and 2014, according to Tominaga.
“It’s positive to see Mitsubishi UFJ acquiring a high-growth fee business overseas,” Takashi Miura, an analyst at Credit Suisse Group AG in Tokyo, wrote in a report on Friday. “This is a business that can expect high growth.”
Shares of Mitsubishi UFJ rose 1 percent at 2:53 p.m. in Tokyo trading, extending this year’s advance to 30 percent, the best performance among Japan’s three largest lenders.
The transaction will elevate Mitsubishi UFJ to sixth among global fund-services companies, up from 15th, based on assets under administration, Tominaga said. The UBS unit operates worldwide including in New York and London, he said.
“AFS’s strong client franchise, global footprint, and notably its strong presence in Asia, are an excellent strategic fit,” Junichi Okamoto, a Mitsubishi UFJ executive who oversees its integrated trust-assets business, said in an e-mailed statement Thursday.
The deal, which is subject to regulatory approval, will be completed in the fourth quarter, according to the statement.
“MUFG’s commitment to invest in the client franchise and the people, together with their strong focus on ensuring a seamless transition, were important factors in our decision-making,” Ulrich Koerner, president of global asset management at Zurich-based UBS, said in the statement.