UBS and Sumitomo Mitsui Trust Holdings Inc. (SuMi Trust Holdings) have agreed to establish a joint venture, 51 percent owned by UBS, that will offer products, investment advice and services beyond what either UBS Global Wealth Management or SuMi Trust Holdings is currently able to deliver on its own.
The JV will open UBS’s current wealth management customer base to a full range of Japanese real estate and trust services, while SuMi Trust Holdings’ clients – one of the largest pools of high-net-worth (HNW) and ultra-high-net-worth (UHNW) individuals in Japan – will be able to access UBS’s wealth management services, including securities trading, research and advisory capabilities.
“No wealth management firm today provides this range of offerings to Japanese clients under a single roof. UBS expects the new joint venture to fill this gap by offering expanded products and services to clients from both franchises,” UBS said in a statement.
“This is the Japanese market’s first-ever wealth management partnership developed between an international financial group and a Japanese trust bank. Subject to receiving all necessary regulatory approvals, the two companies plan to begin offering each other’s products and services to their respective current and future clients from the end of 2019. Also subject to approvals, these activities will ultimately be incorporated into a new co-branded joint venture company by early 2021.”
UBS Group CEO Sergio P. Ermotti said the Swiss banking giant has over 50 years of history in Japan.
“This landmark transaction with a top-level local partner will ideally complement our service and product offering to the benefit of clients,” he said. “The joint venture is a blueprint for how complementary partnerships can unlock value for clients as well as shareholders.”
Zenji Nakamura, UBS’s Japan country head, said the transaction is a boost for the group’s overall business in Japan, bringing reputational benefits to its investment banking and asset management units, which fall outside the alliance.
“It is a new milestone that sends a clear message of long-term commitment to the Japanese market.”
UBS will contribute all of its current wealth management business in Japan to the new company, while SuMi Trust Holdings will extend its trust banking expertise and refer relevant clients to the new joint venture.
Sumitomo Mitsui Trust Holdings is Japan’s largest trust banking group, with Sumitomo Mitsui Trust Bank Limited serving as its core business. It offers a range of services, including banking, real estate, asset and wealth advisory to individuals and corporate clients. As of end March 2018, it held 285 trillion yen in assets under custody – Japan’s largest such pool – and a significant portion of those assets come from HNW and UHNW clients.
UBS boasts over US$2.4 trillion in assets under management. It operates from locations in Tokyo, Osaka and Nagoya.
The two companies have agreed not to disclose the financial details of the transaction.