Commonwealth Bank of Australia (CBA) has agreed to sell Colonial First State Global Asset Management (CFSGAM), its global asset management business, to Mitsubishi UFJ Trust and Banking (MUTB) for A$4.13bn ($2.93bn).
Image: CBA to divest its global asset management business CFSGAM to MUTB. Photo: courtesy of Commonwealth Bank of Australia.
The global asset management business of CBA operates under the name First State Investments, outside of Australia. CFSGAM has offices across Europe, the US and Asia Pacific regions.
The company offers products across equities, alternatives and fixed income. It is said to have specialist capabilities in Asian and emerging markets, alternatives (property and infrastructure), and also passive products.
As of 30 June 2018, the global asset management business of the Australian bank managed A$213bn ($150.97bn) of assets on behalf of institutional investors, pension funds, investment platforms, wholesale distributors, financial advisers and their clients across the world.
The deal with MUTB comes in the wake of CBA’s decision made in June 2018 to separate its wealth management and mortgage broking businesses.
Following the announcement, MUTB approached CBA for the acquisition of CFSGAM and the CBA Board concluded that it would be in the best interests of clients, employees and shareholders to explore a potential sale of the global asset management business.
Owing to the transaction, CFSGAM will not be included in the planned demerger of the wealth management and mortgage broking businesses, said CBA.
CBA CEO Matt Comyn said: “CFSGAM is a high quality business that has achieved strong growth under CBA’s ownership for over 18 years. MUTB is one of the largest asset managers in Japan, with a long history and deep capabilities.
“We believe that CFSGAM’s clients and employees will benefit from MUTB’s supportive long-term ownership”.
MUTB expects the acquisition of CFSGAM to help it address various client requirements by expanding its product lineup and improving its footprint as the largest asset management company in the Asia/Oceania region.
MUTB president and CEO Mikio Ikegaya said: “We expect CFSGAM will continue to deliver leading investment solutions to its existing global client base.
“We also believe CFSGAM’s highly seasoned investment teams and competitive product line-ups will enable us to deliver new investment opportunities to our clients.”
The sale of CBA’s global asset management business to MUTB will be based on receipt of multiple regulatory approvals across various jurisdictions, following which it is likely to be closed in mid calendar year 2019.