(Updating story to add UFJ comment on third paragraph, rewrites first two paragraphs)
Mitsubishi UFJ Financial Group, through its subsidiary MUFG Investor Services, is se to acquire UBS Global Asset Management’s Alternative Fund Services (AFS), the two firms said in a joint statement.
The two parties have already reached an agreement on the deal and the sale is expected to close in the fourth quarter of this year subject to regulatory approvals, the statement said.
“This transaction is part of our strategy to build MUFG Investor Services into an industry-leading administrator, both organically and through acquisitions,” said Junichi Okamoto, group head of integrated trust assets business group, and deputy president of Mitsubishi UFJ Trust and Banking Corporation.
The deal, worth around 30 billion yen ($24 million), would raise the Japanese firm’s fund administration business from 15th to seventh worldwide, with estimated assets of $260 billion, according to Asian Nikkei Review.
Fund administration is a lucrative business with attractive returns, so it’s not surprising to see the Japanese financial firm’s interest in acquiring the business from UBS, one of the top players in the sector.
Nikkei wrote:
“Commissions from fund administration are nearly 10 times those from securities custody operations. Switzerland-based UBS’ fund administration business operates in nine markets, including New York, London and the Cayman Islands. Administering nearly $140 billion in assets, it ranks No. 12 in the world.”
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