Aberdeen Asset Management in Japan Tie-Up

Rachel Walsh

3 October 2008

Japanese banking heavyweight Mitsubishi UFJ Trust and Banking Corporation, a unit of Mitsubishi UFJ Financial Group, has taken a 10 per cent stake in UK's Aberdeen Asset Management as part of an alliance between the two companies.

In a statement Aberdeen revealed that Mitsubishi will have exclusive rights to access its products, including global emerging market equity products, on behalf of Japanese institutional investors. The two firms will also consider partnering in retail services. MUFG may further take up to 19.9 per cent of Aberdeen and appoint a non-executive director to the board if it buys up more than 15 per cent of the company in the future.

The move comes after lengthy examination of strong potential partners, on Aberdeen’s part, with a view to entering the Japanese market. The company’s chief executive, Martin Gilbert described the agreement as long-term, giving Aberdeen “access to the Japanese institutional market place, the second largest market in the world, with $3 trillion worth of assets. It accelerates a strategic objective of establishing ourselves in Japan, a key market for us. Furthermore our strong product offerings in global equities, emerging market equities and global fixed income complement the trend of Japanese investors looking to invest overseas.”.

According to The Daily Telegraph, he also championed the accord as a “strong vote in confidence from one of the world's largest financial institutions” and the final piece of “the puzzle of our global network." However, he conceded, that the long term success of the alliance was difficult to gauge at present, given the “brutal” market climate.

Last month Mitsubishi announced that it was to take a 20 per cent stake in Morgan Stanley in a deal worth about $8.39 billion.

Mitsubishi UFJ is Japan’s largest banking group and the world’s second largest bank holding company with $1.1 trillion in bank deposits.