It isn’t every day that a Japanese manufacturing conglomerate, even one with a history in banking, takes a stake in the international asset management sector.
It isn’t every day that a Japanese manufacturing conglomerate, even one with a history in banking, takes a stake in the international asset management sector. So it is quite a big event when Mitsubishi Corporation, Japan’s largest general trading company, announces plans to enter the alternative investment business in the US.
Mitsubishi will spend USD39m to acquire a 19.5 per cent stake in credit specialist Aladdin Capital, becoming the second-largest shareholder in the manager of fixed income hedge funds and collateralised debt obligations.
In addition, Mitsubishi plans to invest USD300m as seed capital in investment products managed by Aladdin, which had USD17.5billion in assets under management at the end of March.
This is a classic story of the benefits of partnering with a global conglomerate. Mitsubishi, a previous investor with Aladdin, sees the stake as a good opportunity to enter the business and diversify its portfolio into alternative assets. Meanwhile, Mitsubishi’s financial muscle will help Aladdin to capitalise on the numerous opportunities created by recent dislocations in the market.
Alternative investments firms are increasingly becoming acquisition targets. According to Jefferies Putnam Lovell, they accounted for 29 of the 73 deals in the global investment management sector announced so far this year, a record proportion of 40 per cent. More than two-thirds of the transactions, 20 deals, involved hedge fund managers.
