Japan’s ORIX acquires Robeco from Rabobank
Japanese financial services group ORIX Corporation (ORIX) is acquiring approximately 90.01% of the equity in asset manager Robeco from owner Rabobank, for €1.935bn, according to a single statement issued by all parties.
The transaction is subject to legal and regulatory approvals, which are expected to be completed within six months.
Part of the agreement is a strategic alliance between Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. (Rabobank) and ORIX. Rabobank will retain a 9.99% share in Robeco, and continue to cooperate in maintaining and expanding Robeco’s business platform.
ORIX will allocate treasury stock to Rabobank as part of the acquisition price, and as a result Rabobank becomes a shareholder of ORIX.
Tokyo-based ORIX and Rabobank have also agreed that Robeco’s banking activities, which are only based in the Netherlands, will be transferred to Rabobank, with Robeco retaining its client service relations.
The statement said markets have changed “drastically” since the financial crisis and ORIX believes it must forge a new business model, combining finance with related services. “As one of the measures to drive this strategy, ORIX has been seeking to build its presence in the global asset management industry in recent years, as evidenced by the 2010 purchase of Mariner Investment Group in the US” it said.
Rabobank sold its highly-regarded asset manager on the basis that ORIX will enhance Robeco’s future growth prospects. Established in 1964, ORIX serves both corporate and retail customers. It started with a leasing business and has expanded into related fields since then, including real estate, life insurance, banking, as well as environmental and energy related businesses.
The firm has operations to 27 countries and regions since first entering Hong Kong in 1971, and aims to grow further as a global company.
Robeco, headquartered in Rotterdam, is ORIX’s most significant strategic acquisition to date and it will become ORIX’s primary platform for future growth ambitions in global markets.
Robeco will continue to service customers under its existing brand names. Last year assets under management increased by 26% to €189bn at the end of December (2011: €150 bn). Net new cash was also at a record of €18.4 bn. Net profit increased from €134m to €197m. Investment performance was also strong with 65% of Robeco’s assets outperforming their benchmarks.
ORIX has highlighted Robeco’s attraction as the strength of its global brand, a diversified range of businesses across asset classes and regions, the scope of its global distribution network and experienced investments teams.
“As a well-managed and relatively autonomous group of businesses with a good performance record, Robeco is the ideal vehicle for ORIX to pursue its ambitions in global asset management,” the statement said. “Growth opportunities also exist in the pension and asset management markets in Asia and Middle East where ORIX has an established network.”
The new owner said it would support Robeco’s existing 2010-2014 strategy, services to clients, investment processes and teams. Robeco’s management board will remain in their current roles with Roderick Munsters continuing as CEO and reporting to ORIX headquarters.
Robeco Group NV’s legal structure will remain unchanged, as will the current governance and reporting lines from Robeco’s subsidiaries. ORIX said it would also retain Robeco’s Supervisory Board structure, including both independent members as well as representatives from ORIX.
Yoshihiko Miyauchi, CEO of the ORIX Group, described Robeco as “a global company with an outstanding brand and excellent management, well-diversified in all aspects including asset management products, investor clientele, managed portfolio, and regional presence”.
“The management team has displayed tremendous performance over the years and we are confident that they will continue to accomplish this going forward. ORIX will pursue further expansion in Europe and the U.S, as well as growth in Asia and Middle East regions where it has a strong platform.”
Piet Moerland, chairman of the Executive Board of Rabobank Group, said the sale of Robeco is the start of a new beginning. “Rabobank and Robeco have strengthened each other over the past decades by working closely together in serving their clients. This cooperation will remain. Robeco is a solid asset manager, with a track record of being innovative, for instance by introducing pension solutions. Robeco has now the opportunity to develop further under ORIX’s ownership.”
Roderick Munsters, CEO of the Robeco Group noted that the ORIX Corporation, like Robeco, is a client focused organization with an entrepreneurial culture. “As part of ORIX Group, we will continue to serve our clients’ best interests and achieve attractive investment returns.”
Founded as ‘Rotterdamsch Beleggings Consortium’ in 1929 in the Netherlands, Robeco was acquired by Rabobank in 2001. Robeco Group started in 1929 with Robeco NV, a global equity fund. Official performance since March 1933, when the fund was incorporated, has been 8.2% average per year.
The following subsidiaries and joint ventures are part of Robeco Group: Robeco Boston Partners, Robeco Weiss Peck & Greer, Corestone Investment Management, Harbor Capital Advisors, Transtrend, RobecoSAM and Canara Robeco Asset Management Company.