UBS Global Asset Management has entered into an agreement with Daehan Investment & Securities Co. Ltd. to acquire 51% of Management Co. Ltd., one of Korea’s largest asset management companies.

UBS will pay 150 billion Korean won (approximately US$162.2 million) plus a KRW30 billion (US$32.4 million) earn-out for its stake immediately, subject to customary purchase price adjustment and to an earn-out claw back of up to KRW30 billion over the next three to five years. The transaction remains subject to regulatory approval.

Under the joint venture, DIMCO will be known as UBS Hana Asset Management Co. Ltd. internationally, and as Hana UBS Asset Management in Korean. DIMCO manages around 18.7 trillion Korean won (equivalent to approximately US$20.3 billion) of assets and is one of the market leaders in the Korean asset management industry. It is wholly owned by DI&S, which itself is wholly owned by Hana Financial Group.

“The establishment of the joint venture between UBS and DIMCO is another important step towards fulfilling UBS Global Asset Management’s ambition to build a strong presence in Korea’s asset management industry and broaden the scope of our business in Asia Pacific,” said John Fraser, chairman and CEO of UBS GAM.

“UBS Hana Asset Management will be one of the largest asset managers in the Korean market which represents an important source of new business for UBS. In light of Korea’s strong underlying economic growth, continuing reform of the pensions market and the increasing sophistication of investors, we believe that the Korean asset management market offers very significant potential for growth and will be an increasingly attractive destination for foreign investment,” he added.

“UBS’s expertise in the international arena complements perfectly Daehan Investment Trust Management Company’s well established foothold in and knowledge of, the Korean market,” said DI&S vice-chairman Wangha Cho. “I am confident that having UBS as a partner will allow us to ensure that the company operates in accordance with international best practices but also enhances our ability to meet the needs of the growing client base in Korea.”

“I look forward to working with our new partners. We will combine UBS’s specialized knowledge and global perspective, with the local market knowledge and expertise of DIMCO’s existing employees. The combination of our respective strengths will create what I am confident will be a united business which will be better able to meet the needs of its clients and interests of its shareholders,” added Andreas Neuber, Head of Strategic Projects Asia Pacific at UBS GAM and designated chairman of the board at UBS Hana Asset Management.