NTUC and Fullerton agree on strategic partnership

08 December 2017   Category: News, Asia, Singapore   By Asia Asset Management

Singapore’s NTUC Income and Fullerton Fund Management Company Ltd. (Fullerton) have agreed on a strategic partnership in which the former will become a “significant” minority shareholder in the latter’s parent company, FFMC Holdings Pte. Ltd (FFMC Holdings). Fullerton will also manage billions of dollars worth of assets for NTUC Income, an insurance company.

The move follows months of speculation of a merger between NTUC Income and Fullerton.

Under the deal announced on December 7, FFMC Holdings will issue an unspecified number of new shares to NTUC Income. As a result, NTUC Income will hold a "significant minority" stake in FFMC Holdings. Temasek Holdings, the city state's sovereign wealth fund, will remain the majority shareholder in FFMC Holdings.

“We are unable to offer details in this regard as the proposed partnership is now pending regulatory approvals and other customary closing conditions,” a Fullerton spokeswoman says in response to questions from Asia Asset Management.

The deal will also see Fullerton appointed as investment manager of a portfolio of NTUC Income's assets, estimated at S$23 billion (US$17 billion), according to a joint statement from the companies.

The planned alliance will establish Fullerton as one of the largest locally-owned asset management companies in Singapore, with assets under management of over S$40 billion.

Ken Ng, NTUC Income’s chief executive officer, says the company is always looking out for opportunities to create more value for its policyholders.

"We believe this proposed partnership with Fullerton is in our best interest to leverage economies of scale and tap the established and deep investment expertise of our combined investment capabilities to serve our policyholders better," Mr. Ng says in the statement.

Png Chin Yee, head of financial services at Temasek Holdings, says the deal will strengthen Fullerton's position as an "Asian and emerging market specialist".

Jenny Sofian, Fullerton's recently appointed chief executive officer, says the company is excited about working with NTUC Income and leveraging the "potential opportunities that the proposed partnership will bring".

"Our priority is to ensure the continued delivery of strong investment performance and the highest level of service to our clients," she says.