- Bank will sell U.S. firm's products to Japanese investors
- NHK says Mizuho will pay about $200 million for 16% stake
Mizuho Financial Group Inc. will buy a minority stake in Matthews International Capital Management LLC, an Asia-focused U.S. asset manager, to capitalize on a shift from savings to investment in Japan.
Japan’s third-biggest bank by market value will take a 16 percent stake in the firm also known as Matthews Asia, which manages around $26 billion in assets, the companies said in separate statements that didn’t disclose financial terms. Public broadcaster NHK earlier reported that Mizuho will spend about $200 million on the deal.
Japanese banks including Mitsubishi UFJ Financial Group Inc. are seeking to expand their asset-management operations as Prime Minister Shinzo Abe encourages citizens to do more with their 1,700 trillion yen ($14 trillion) of financial assets, most of which is in cash. Fees from the business can help lenders make up for a drop in loan profitability at home as low interest rates squeeze margins.
“The current trend toward a strategy of earning fee income without using capital is positive,” said Takashi Miura, an analyst at Credit Suisse Group AG in Tokyo. “Asset management is a field that will undoubtedly grow both in Japan and overseas.”
Mizuho will distribute Matthews Asia’s products to Japanese individual and institutional investors, the Tokyo-based bank said. The transaction will probably close by the first quarter of 2016, and Mizuho will take a seat on the management board.
“Mizuho’s investment will help ensure continued long-term stability of ownership,” William Hackett, chief executive officer of San Francisco-based Matthews Asia, said in the statement.
Separately, Mizuho and Dai-ichi Life Insurance Co. agreed to integrate some asset-management operations into a joint venture. The new company will promote more active investment of individuals’ money as well as serve pension funds and institutional investors, the firms said in a statement Wednesday, without mentioning financial terms.
For Mitsubishi UFJ, an asset-management platform remains the “missing piece” of its overseas business, CEO Nobuyuki Hirano said in an interview published this month. Japan’s biggest bank has prepared a shortlist of companies that it may consider acquiring in the U.S., with a price range in the billions of dollars, he said.
Mizuho bought a stake in BlackRock Inc., the world’s biggest asset manager, in 2010 and formed an alliance to cooperate with the firm. The Japanese bank holds 2 percent of New York-based BlackRock, data compiled by Bloomberg show.
Japanese insurers have also been investing in asset managers abroad as bond yields stay low. Dai-ichi Life, the nation’s second-largest life insurer, bought a stake in Janus Capital Group Inc. in 2012 and is now the Denver, Colorado-based firm’s largest shareholder with a holding of about 20 percent, according to data compiled by Bloomberg. Larger competitor Nippon Life Insurance Co. boosted its stake in India’s Reliance Capital Asset Management Ltd. to 35 percent last year.