The agreement, entered into on 25 February, will be in all-cash deal and is subject to regulatory approvals from the Indonesian Financial Services Authority (Otoritas Jasa Keuangan or OJK), the Monetary Authority of Singapore, and shareholders of NISP Asset Management, Aberdeen Asset Management said.
Following approval, a change of control at NISP Asset Management will result in Aberdeen assuming management and operational responsibility.
Aberdeen Asset Management Asia’s managing director, Hugh Young, said: “We see enormous potential in Indonesia given its growth characteristics. Rising real wealth is increasing savings and that is creating demand for investment products that can tap opportunities in capital markets, whether in Indonesia or overseas.”
The growth prospect in the country has been attracting attention of fund managers, with Eastspring Investments, part of the Prudential Group, beginning operations there in 2012. It also recently started an institutional business in Jakarta.
The total assets under management of the Indonesian mutual fund industry increased by 2.64% to IDR192.54trn by the end of last year. Currently, there are approximately 160,000 retail mutual fund investors in Indonesia, which has a population of around 250 million.
Aberdeen Asset Management Asia has been investing in Indonesia since the 1980s and has in excess of US$2.8bn invested in Indonesian equities on behalf of clients globally. It was the first foreign asset manager to launch a dedicated Indonesian equity fund in Singapore in 1997, which has grown to S$180m as of January-end.
NISP Asset Management was spun out of NISPS in 2011, having been in operation as a fund manager in Indonesia since 2001. It currently manages assets worth IDR3.5trn (approximately US$300m) in mutual funds, protected funds and discretionary accounts on behalf of institutional, corporate and retail clients in Indonesia. NISP Sekuritas is controlled by the Surjaudaja family, founders of Bank NISP that was established in 1941 and is now a subsidiary of OCBC Bank and known as Bank OCBC NISP.