Principal Financial Group (“Principal”) and CIMB Group Holdings Berhad (“CIMB”) have announced that they have signed agreements for Principal to gain additional ownership of the CIMB-Principal Asset Management Group and CIMB-Principal Islamic Asset Management, pending regulatory approval.
Once complete, Principal will increase its ownership stake to 60 percent with CIMB retaining 40 percent ownership in the entities. The joint ventures will continue to be co-managed by both companies.
“Southeast Asia is a growing and important region for Principal as we focus on bringing long- term saving and investing products to the market,” said Pedro Borda, president of Southeast Asia and India for Principal. “By increasing our ownership stake in the CIMB-Principal joint ventures, we will be better able to bring our global asset management expertise and experience to bear while still leveraging the multi-channel distribution power of CIMB to continue to serve our customers.”
This transaction is expected to be completed in the second quarter of 2018 and is subject to the relevant regulatory approvals across the region. Principal will pay CIMB up to MYR470.3 million (approximately US$117 million*) for the additional ownership stake.
“As a leading ASEAN universal bank, asset management continues to be an integral part of our regional banking business. This shareholding realignment will ensure that our asset management joint venture with Principal achieves its maximum potential and continues to be sustainably value- accretive to CIMB,” said Tengku Dato’ Sri Zafrul Aziz, Group Chief Executive Officer, CIMB Group. “Scale and extensive investment expertise are important to this business and we believe this strategic realignment will enhance the value proposition of the joint venture to enable us to serve our customers better.”
The new ownership and governance structure will strengthen the joint ventures’ capability to provide specialized and differentiated products and services to meet customer needs. It will further align existing investment management teams with the asset management arm of Principal, Principal Global Investors, and leverage the firm’s global distribution capabilities and asset management franchise.
CIMB Group and Principal have partnered in the region since 2004 and have successfully grown their operations across Malaysia, Singapore, Indonesia and Thailand. The CIMB-Principal Asset Management group of companies has more than MYR70 billion in AUM and is one of the largest asset managers in the region. CIMB-Principal Islamic Asset Management has been managing Islamic institutional mandates since 2008 and is the sole end-to-end Islamic asset management boutique of the CIMB Group and Principal Financial Group.