Japan’s largest bank takes 10% stake in Aberdeen Asset Management

In the same week as it agreed to buy a 21 percent stake in Morgan Stanley for $9bn, Mitsubishi has struck a deal to buy a minority stake in Aberdeen. It gives the Japanese bank exclusive rights to market Aberdeen’s products in Japan, while providing Aberdeen with a fresh well of equity in the world’s second largest pension market.

Aberdeen Asset Management, the European firm which owns Aberdeen Property Investors, is selling a 10 percent stake to Mitsubishi UFJ Financial Group.

Under terms of the so-called “alliance”, Japan’s Mitsubishi will be locked in for one-year and can purchase further shares up to a maximum of 19.9 percent, said Aberdeen.

Mitsubishi is Japan’s largest bank and is listed on the Tokyo stock exchange with a market capitalisation of $92 billion. It has $1.1 trillion of savings accounts.

The capital injection is the second this week for Mitsubishi having earlier agreed to take a 21 percent stake in Morgan Stanley for $9 billion. Today the Japanese titan said it is considering merging its investment banking unit with the Japanese operations of Morgan Stanley.

Its latest target, Aberdeen, is a European asset manager listed on the London Stock Exchange which owns €143 billion ($226 billion) of assets. Among its various businesses is Aberdeen Property Investors managing €30 billion of real estate.

Shares in Aberdeen spiked 7 percent yesterday on news of the deal, before falling back slightly today to 131 pence a share, valuing the company at £846 million (€1 billion; $1.5 billion).

In a statement, Aberdeen said Mitsubishi had agreed to promote Aberdeen’s products in Japan, initially emerging market equities, global equities and global fixed income. The benefit to Aberdeen is that it gives the firm access to the second largest pension market in the world. It said: “Japanese institutions are increasingly allocating assets outside their domestic market.”

Martin Gilbert, chief executive, said the partnership “accelerated its strategic objective” to establish the business in Japan.

The news follows an announcement by Aberdeen Property Investors earlier this week of management changes following its acquisition of German fund manager DEGI and Goodman Property Investors earlier this year.

It said Jon Lekander, formerly chief investment officer, had become head of the combined indirect investment management team. The former managing director of Aberdeen Property Investors indirect investment management, Anders Åström, and his deputy Tomas Otterud, have both decided to leave the firm.

Andrew Smith, formerly head of strategy and indirect investment management at Goodman Property Investors has been appointed chief investment officer. He will also oversee all international property transactions activities, led by Malcolm Morgan who joined the business as part of the DEGI acquisition.

The Nordic region, including Eastern Europe, will be led by Pertti Vanhanen, who has been with Aberdeen Property Investors for six years, building up the Finnish operation. He also remains managing director of Aberdeen in Finland. Bärbel Schomberg, chief executive of DEGI has been appointed head of continental Europe covering Benelux, France and Germany. John O’Connor, previously managing director at GPI, will be responsible for the UK region. Each of these regions corresponds approximately to a third of Aberdeen’s property assets under management, according to the firm.

Rickard Backlund, chief executive of Aberdeen Property Investors, said: “The acquisitions of DEGI and GPI have propelled Aberdeen property Investors into the top ten of property asset managers globally. I am very pleased that we now have an international senior management team in place to build.”