Korea’s Mirae shelves plans to acquire Indonesian asset manager

JakartaMirae Asset Global Investments has shelved plans to acquire a 70% stake in Jakarta-based NISP Asset Management.

A spokesperson for Seoul-headquartered Mirae Asset says the deal fell through because of “the timing and finding the right company that fits”, adding that the management is still looking for possible acquisitions.

NISP Asset Management could not be reached for comment.

Tae Yong Lee, who leads Mirae Asset’s global business, told Funds Global Asia, a sister publication of Funds Europe, at the end of last year that he planned to advance into Southeast Asia, including Indonesia, to manage and distribute its investment funds.

Mirae Asset had planned to acquire the shares from NISP Sekuritas, a prime securities company in Indonesia, and launch and manage various onshore fund products in the country.

It was also contemplating various strategies in Korea, such as showcasing Indonesian fixed income funds.

It had already signed a conditional shares purchase agreement to acquire a 70% stake in the local Indonesian asset manager, hoping to become the first among its Korean peers to gain foothold in Southeast Asia.

NISP Asset Management is a pure Indonesian asset manager which, when the deal was announced publicly, had $440 million of assets under management, excluding state-owned affiliates and foreign-based entities.

The cancellation of the deal takes place as merger and acquisition activity in the financial services sector generally has increased. Sandler O’Neill + Partners, a US investment banking firm and broker-dealer focused on the financial sector, recorded 143 transactions throughout 2012, an 8% increase from the 123 deals announced in 2011.

“Controlled optimism was readily apparent, as buyers transacted more but spent less – showing a more active buyer universe, albeit one still wary of large bets on transformational deals,” it says in a report, entitled Shifting into higher gear.

While the overall level of transacted assets under management increased to $1.5 trillion from just under $1.3 trillion in 2011, the median disclosed deal value actually fell to $11 8 million from just over $140 million in 2011.

Similarly to 2011, the firm says, acquisition targets in 2012 were of “mixed quality, ranging from asset managers with attractive product suites and strong growth trajectories to firms that have struggled in the face of the post-2008 investor climate and needed a consolidator as a last resort”.

©2013 funds europe