ING Group NV's a la carte divestment of its investment management operations in Asia could be entering the final phase of a process marked by the seller's lack of leverage with potential buyers.
Investment bankers say ING Investment Management's operations in Taiwan and South Korea, its remaining jewels, will be the last pieces of the firm's regional lineup to attract interest in coming months, following recent sales of its money management businesses in China, Thailand and Malaysia.
Combined, proceeds for the pieces might come to little more than $250 million for a business that boasted more than $55 billion in assets under management as recently as mid-2012, said one investment banker in Asia, who declined to be named. That would be a fraction of what ING apparently hoped it could get, he added.
If so, the sum of ING Investment Management's parts in Asia would appear to be less than the whole — especially when separated from the firm's insurance operations, which have contributed a big chunk of ING IM's assets under management in a number of markets.
Investment bankers say ING's market-leading money management business in Taipei is likely to be the next business to be sold. They expect it to attract interest despite a recent trading scandal involving a vice president at the firm that ended last November with ING agreeing to pay US$8.8 million in compensation demanded by Taiwan's Labor Pension Fund.
Selling ING's business in Korea could take a bit longer — reflecting the complications of selling the firm's insurance and investment management businesses there separately. According to bankers and recruiters, ING's life insurance business in Korea accounts for roughly two-thirds of the investment management business' AUM, making it difficult to sell the investment management arm first. If a big Korean life insurer with its own asset management business buys ING's insurance business, it would likely transfer all of those insurance assets to its own manager, diminishing the value of ING's investment management business, noted one banker.
ING's Japanese and Singapore offices will be retained, but its regional hub in Hong Kong is being “wound down over time,” said spokeswoman Victorina de Boer.
Reached by e-mail, Gilbert van Hassel, ING Investment Management's CEO, wouldn't comment on whether the firm might rebuild its Asia Pacific manufacturing capabilities at some point.
An infusion of €10 billion ($13.1 billion) for ING from the Dutch government during the global financial crisis came with the stipulation that the bank would divest its insurance and investment management operations by the end of 2013.
In pursuit of that commitment, ING initially had planned a combined listing of its insurance and investment management operations in the U.S., and another listing for its European and Asian insurance and investment management business.