SINGAPORE: NTUC Income has appointed Fullerton Fund Management as the investment manager of a portion of its assets.
The asset management company will manage a portfolio of the insurer estimated to be worth S$23 billion. In turn, the holding company of Fullerton, Fullerton Fund Management Company (FFMC) Holdings, will issue new shares to NTUC Income.
Both companies announced this proposed partnership on Thursday (Dec 7) in a joint media release.
The deal is pending approval from the authorities and other closing conditions. Once it is approved, NTUC Income will become a significant minority stakeholder in FFMC Holdings.
Temasek will remain the majority stakeholder.
When the partnership is completed, Fullerton will be one of the largest asset management firms in Singapore that is locally-owned, with more than S$40 billion of assets under management.
The proposed partnership aims to tap the complementary expertise of NTUC Income and Fullerton’s investment teams, the press release said.
Fund management personnel from NTUC Income will join Fullerton as part of the deal.
NTUC Income’s CEO Ken Ng said: “We believe this proposed partnership with Fullerton is in our best interest to leverage economies of scale and tap the established and deep investment expertise of our combined investment capabilities to serve our policyholders better.”
Both companies highlighted that this deal is not a merger. NTUC Income and Fullerton will remain independent entities.
Corporate lawyer Robson Lee told Channel NewsAsia that the proposed partnership is a good and timely move.
“Fullerton has the expertise and critical mass of talent which NTUC Income may not have,” said the lawyer at Gibson Dunn.
He also added that NTUC Income having a stake in FFMC means that the insurer would have certain influence over how the fund is managed.
When asked whether such a deal is common in the fund management sector, he said that it is the first in a long while that a fund of such size is entering into such a partnership.
“Consolidation is necessary in many industries, why not fund management?” he said.