SINGAPORE/HONG KONG (Reuters) - Japan’s Nikko Asset Management and U.S.-based Principal Financial Group (PFG.N) are among the suitors to advance to the next round of bidding for ING Groep’s ING.AS Asia asset management business in a deal that could be worth up to $600 million, sources familiar with the matter said.
Royal Bank of Canada (RY.TO) and Singaporean bank United Overseas Bank Ltd (UOB) (UOBH.SI) are the other shortlisted parties, the sources said. It was not immediately clear if other bidders have progressed to the next round.
A successful buyer will get a ready platform to expand into Asia’s rapidly growing funds management business. The Asian asset management industry, excluding Japan, is expected to double its assets to $4 trillion by 2015, driven by growing wealth in the region, rising foreign demand and new pools of assets from insurance and retirement funds, according to a report commissioned by Citigroup’s C.N Securities and Fund Services.
The Dutch bancassurer is selling its Asian asset management and insurance businesses in two separate auctions that are expected to fetch more than $7 billion in total.
The proceeds will help ING repay the state bailout it received after the largest Dutch financial services company almost collapsed during the 2008 global crisis.
Spokespeople for Nikko , Principal, RBC and UOB and declined to comment. An ING spokeswoman in Hong Kong also declined comment.
The shortlisted bidders will pore over detailed financial information and meet with ING’s management over the next two weeks before deciding whether to submit a final binding bid for the business.
ING’s asset management sale is linked closely with the outcome of the insurance auction as nearly half of the 43.3 billion euros ($54.29 billion) that it oversees in the Asia-Pacific region comes from the life insurance operations. It is unclear how much of the insurance-linked money will remain with the asset management company after ING sells the insurance unit.
The asset management sale had attracted huge interest with more than 20 potential suitors lining up to get access to the preliminary sale documents.
UOB’s bid for ING’s asset management arm is aimed at scaling up its own asset management business to rival Lion Global Investors, which is controlled by Oversea-Chinese Banking Corp (OCBC.SI).
UOB Asset Management manages S$18.8 billion ($14.72 billion) worth of funds as of Jan 31, while Lion Global manages about S$28 billion as of March 31, 2012.
ING operates in Japan, South Korea, Taiwan, China, Hong Kong, Malaysia and Thailand, and employs about 230 investment professionals. ING only manages third-party money in Taiwan and sources say it could sell that operation separately.
Profit from ING’s global investment management business stayed flat at 45 million euros in the first quarter from a year ago and was down from 53 million euros in the last quarter. ING does not give earnings details of its Asian investment management operations.
($1 = 1.2774 Singapore dollars)
($1 = 0.7976 euros)
Reporting by Saeed Azhar and Denny Thomas; Editing by Matt Driskill