Manulife to buy Malaysian unit trust firm
18 November 2013
Category: News, Global, Malaysia, Canada
By Asia Asset Management
Manulife Holdings Berhad (MHB), part of Canada-based Manulife Financial, announced on November 13 that it has entered into an agreement with MAA Group Berhad and other shareholders to acquire 100% of its subsidiary MAAKL Mutual Bhd, a successful Malaysian unit trust company. The deal is expected to close within the next two months, subject to regulatory approval. This acquisition will increase MHB's total assets under management to 7 billion Malaysian ringgit (US$2.2 billion), making MHB's unit trust assets one of the top ten largest in the country.
Group CEO of Manulife Holdings Berhad, Mark O' Dell, commented: "This acquisition gives us an excellent opportunity to accelerate Manulife Asia's growth strategy in Malaysia. Malaysia's working age population is expected to remain approximately 60% of its total population over the next 40 years which, fuelled by growth in savings and income together with increasing financial literacy, clearly indicates an increasing demand for investment products."
Mr. O'Dell added: "The professionalism and commitment of MAAKL's unit trust advisers in earning their customers' trust are impressive. Their success highlights that there is a market need for professional investment advice and retirement planning. We aim to build on their strong foundation over the coming years and are pleased to welcome all of MAAKL's unit trust advisers to our family of over 50,000 agents across Asia. We trust that they will benefit and further enhance their success by leveraging on Manulife's expertise in agency distribution and by providing access to world class global investment management through our asset management arm, Manulife Asset Management."
Incorporated in October 2000, MAAKL currently offers 27 unit trust funds, ten of them being Islamic funds and 19 are Employees Provident Fund (EPF) approved funds, with a total net asset value of 2.47 billion Malaysian ringgit. MAAKL is currently ranked in ninth position in the private unit trust industry in terms of total fund size, and distributes its funds via a direct sales force of more than 1,100 unit trust advisers.
Most of the investment management responsibility for MAAKL's funds will be transferred to Manulife Asset Management Services Berhad (MAMSB), a wholly owned MHB subsidiary, subject to regulatory approval. MAAKL's operations are expected to merge with MAMSB after completion of the transaction.
Michael Dommermuth, president, international asset management for Manulife Asset Management, said: "Manulife Asset Management believes in on-the-ground presence, which provides us with local intelligence and allows us to establish expertise in specialist fields, such as our Islamic finance capabilities in Malaysia and Indonesia and our RMB bond expertise in Greater China. That is why we have a vast network of investment professionals across 17 countries and territories."
Mr. Dommermuth went on to add: "We are in a low interest rate era and there are no purely domestic solutions for achieving a well-diversified investment portfolio to allow for efficient deployment of investors' assets. Therefore, some foreign investing is beneficial. With this transaction extending the reach of our asset management franchise here in Malaysia, we look forward to leveraging our global expertise to bring a broad spectrum of equity, fixed income and asset allocation solutions to local investors."