Yarra Capital Management, a Melbourne-based equity and fixed-income boutique, will acquire Nikko Asset Management's Australian business.
Combining Yarra's roughly A$8 billion ($6.3 billion) in assets under management with Nikko's A$12 billion business will create "one of Australia's largest independent fund managers" with AUM of about A$20 billion, Dion Hershan, Yarra's managing director and head of Australian equities, said Tuesday in a joint news release.
Under the merger Nikko Asset Management will get a 20% stake in Yarra Capital Management, the news release said.
Further financial details of the deal are not being disclosed, a Yarra spokesman said.
Nikko Asset Management acquired its Australian equities and fixed-income business more than a decade ago with the purchase of Tyndall Investments — then managing assets of A$25 billion — from Brisbane-based financial services conglomerate Suncorp Group.
With the expected completion of the Yarra-Nikko transaction in April, Nikko Asset Management's Australian equity business — with its 11-person investment team — will be rebranded under the original Tyndall name.
The Tyndall Australian equities business, with its value tilt, will be kept separate and distinct from Yarra's style-neutral equities business, the news release said.
Brad Potter, Nikko Asset Management's head of Australian equities, will become head of Australian equities for Tyndall. Mr. Hershan will become executive chairman and head of equities at Yarra following the deal's close.
Yarra Capital Management and Nikko Asset Management have A$6.5 billion and A$10 billion, respectively, in equities AUM.
Nikko's roughly A$2 billion Australian fixed-income business, meanwhile, will be combined with Yarra's A$1.5 billion in fixed-income operations. Roy Keenan, Yarra's head of Australian fixed income, and Darren Langer, Nikko Asset Management's head of Australian fixed income, will become co-heads of the combined business.
Under the agreement, both firms will distribute the other's products, with "Nikko Asset Management's global business gaining access to Yarra's Australian equity and fixed-income products, and Yarra assuming responsibility for the distribution of Nikko Asset Management's global suite of products in the Australian market."
A spokesman for Nikko, which reported $284.4 billion in assets under management as of Dec. 31, couldn't immediately say why the Tokyo-based firm was selling its business in Australia.