Under the deal, expected to close by the end of 2025, the Japanese group will obtain three entities that run the Macquarie US and European asset management business, which will significantly boost Nomura's footprint in this area. The purchase price, in an all-cash deal, is $1.8 billion.

Nomura has agreed to acquire Macquarie’s US and European public asset management business, with about $180 billion in retail and institutional client assets across equities, fixed income and multi-asset strategies.

Under the terms of the agreement, Nomura will acquire the entire stock of the three companies that operate Macquarie’s US and European public asset management business for an all-cash purchase price of $1.8 billion (subject to closing adjustments). 

More than 700 employees at Macquarie will join Nomura, the latter organisation said in a statement yesterday.

The transaction is targeted to close by the end of the calendar year, subject to customary closing conditions and regulatory approvals.

Japan-headquartered Nomura said it has identified global asset management as a “key strategic growth priority” for the organisation. 

Nomura said the deal will “significantly” expand the global capabilities and client footprint of its investment management division, which manages about $590 billion in client assets.

Once the acquisition is wrapped up, total AuM at Nomura’s investment management arm is expected to rise to around $770 billion, with more than 35 per cent being managed on behalf of clients outside Japan. 

This acquisition will also provide Nomura with a with a “scaled hub,” headquartered in Philadelphia, to expand its international investment management business, it said.

Macquarie’s investment management business has a presence on nine of the top 10 retail distribution platforms in the US, as well as institutional relationships, including within US insurance, a growing sector for asset managers globally. 

The acquired firm, established in 1929, started as Delaware Investments and was acquired by Macquarie in 2010.

The Macquarie business is managed by a team led by Shawn Lytle (president of the Macquarie Funds and head of Americas for Macquarie Group). Lytle, alongside John Pickard, chief investment equities and multi-asset, Greg Gizzi, CIO fixed income, and Milissa Hutchinson, head of US wealth, will continue to manage the business following the acquisition. 

“In partnership with this management team, Nomura plans to carry out several initiatives to support organic growth, increase AuM scale, and diversification of the business’s capability set post-acquisition,” Nomura said.

The initiatives will include developing new investment capabilities designed to meet the needs of clients; scaling the active exchange-traded fund platform established by the business in mid-2023; investing in talent and data analytics to grow the distribution platform, and leveraging the business’s existing distribution channels to provide its retail and institutional clients with access to the broader set of Nomura asset management capabilities.

“This acquisition will align with our 2030 global growth and diversification ambitions to invest in stable, high margin businesses,” Kentaro Okuda, Nomura president and group CEO, said. “It will be transformational for our investment management division’s presence outside of Japan, adding significant scale in the US, strengthening our platform, and providing opportunities to build our public and private capabilities.”

A joint working group between Nomura and Macquarie will also be established to explore additional potential opportunities through further collaboration between the two organisations.

Ratings commentary
Fitch Ratings today said Nomura’s acquisition would not affect its Japan-based ratings. The acquisition is “strategically aligned with its efforts to enhance stable earnings generation, Fitch Ratings said in a statement. The acquisition does not affect the Japan-based Nomura’s ratings.

The deal fits with Nomura's strategy to “increase stable, fee-based revenue and expand asset management capabilities,” it said. “This supports Nomura's goal of building recurring income to offset volatility in its wholesale business, which has been a weakness in its credit profile.”

Fitch said the purchase of the business was not without its risks, however.

“Integration is a risk, considering Nomura's mixed record with M&A execution. The transaction may also present challenges related to business integration and financial management until benefits are realised,” it said. “Fitch will monitor the integration of the acquired business and its contribution to Nomura's profitability targets, particularly as the company works toward achieving its medium-term target of 8 per cent-10 per cent return on equity by 2030, which remains challenging in the current market environment.”