Swiss investment bank UBS and Sumitomo Mitsui Trust (SuMi Trust) have agreed to create a wealth management joint venture (JV) in Japan.
The new joint venture, which is expected to address the needs of wealthy individuals, will combine the global capabilities of UBS in wealth management with SuMi Trust’s position of being the largest, independent trust bank in Japan.
UBS will own 51% stake in the joint venture, while the Japanese trust bank will hold the remaining 49% stake. The new entity will provide products, investment advice and services that are currently not offered by either UBS Global Wealth Management or SuMi Trust on their own.
UBS Group CEO Sergio Ermotti said: “UBS has over 50 years of history in Japan, and this landmark transaction with a top-level local partner will ideally complement our service and product offering to the benefit of clients.
“The joint venture is a blueprint for how complementary partnerships can unlock value for clients as well as shareholders.”
The joint venture is expected to open the current wealth management customer base of the Swiss investment bank to a complete range of Japanese real estate and trust services. On the other hand, SuMi Trust’s clients will gain access to UBS’ wealth management services such as securities trading, advisory, and research capabilities.
The Swiss bank will contribute 100% of its current wealth management business in Japan to the joint venture, while its Japanese partner will offer its trust banking expertise and refer relevant clients to the new company.
UBS Japan Country head Zenji Nakamura said: “This transaction is a boost for our overall business in Japan, as it also brings reputational benefits to our investment banking and asset management units which fall outside this alliance. It is a new milestone that sends a clear message of long-term commitment to the Japanese market.”
The transaction will be subject to receipt of all required regulatory approvals with the two partners planning to start offering each other’s products and services to their respective current and future clients from the end of this year. Subject to approvals, the activities will be incorporated eventually into a new co-branded joint venture firm by early 2021.