Nikko Asset Management, the fund management arm of Japan’s Sumitomo Trust & Banking (8403.J), will buy Singapore’s DBS Asset Management in a deal valued at $105 million as it strives to turn itself into a large pan-Asian fund manager.

Under the terms of an agreement announced on Monday, Nikko Asset will acquire DBS’ asset management arm for $137 million. DBS will use the money received to buy a 7.25% stake in the enlarged Nikko Asset.

DBS (DBSM.SI) will not inject the asset management unit’s 33% stake in Chinese joint venture Changsheng Fund Management into Nikko, the two firms said in a joint statement that confirmed a Reuters report last week. 

 

“The move is aligned with our overall group strategy, which aims to strengthen asset management operations in Asia,” said Hitoshi Tsunekage, CEO of Nikko Asset’s parent company Sumitomo Trust.

 

DBS said its asset management unit together with its Malaysian affiliate managed US$7 billion ($9.13 billion) in assets as of September 2010, suggesting Changsheng had around US$13 billion as the Singapore bank had previously said its fund management unit has about US$20 billion in assets under management.