Tokyo-based Nomura (ADR)(NYSE: NMR) agreed to acquire 41% of American Century Investments from CIBC, for $1 billion. The transaction is expected to close in the first half of 2016, pending regulatory approvals.
Post transaction, the controlling owner of American Century remains the Stowers Institute for Medical Research, a non-profit basic biomedical research organization. The late James Stowers Jr. founded American Century in 1958 and later, in 1994, co-founded the Stowers Institute for Medical Research with his wife, Virginia.
“We welcome Nomura as a new strategic partner in the ownership of American Century and look forward to a long and successful relationship,” said Richard W. Brown, chairman of American Century, and its parent the Stowers Institute for Medical Research. “The two firms share a similar client-centric vision founded on the principle that the ultimate measure of performance is our clients’ success. Given the complementary strengths and global growth ambitions of Nomura and American Century, I know this partnership is in the best long-term interests of our clients, employees and both firms’ shareholders.”
“The strength of Nomura’s asset management business in Asia complements American Century’s own success in North America,” said Jonathan S. Thomas, American Century president and chief executive officer. “By leveraging our new partnership with Nomura, we’ll be able to build upon the success of our global business and broaden the array of clients who can access our investment management capabilities.”
“As we welcome Nomura as a strategic partner, I want to thank CIBC for what proved to be a mutually beneficial relationship over the past four years. Going forward, CIBC remains one of our largest and most-valued clients,” said Thomas.
“We have enjoyed a strong and mutually beneficial relationship with American Century, and our minority position in their business has proved to be a very good investment for our shareholders,” said Victor Dodig, CIBC president and chief executive officer. “Recognizing that a path to control was not going to be available over time, we made the decision to work with ACI to monetize our investment. Through this divestiture we have further strengthened our strong capital position and we are moving forward with a clear set of strategic priorities to drive our long-term growth.”
The deal allows Nomura to access and leverage American Century’s asset management capabilities in order to develop investment solutions for its institutional and retail clients internationally. It also helps the firm further diversify its business interests, giving Nomura an expanded geographical presence in the U.S. investment management market. For American Century, the transaction provides the global asset management firm with a strategic partner whose prominence in Japan, Asia and other parts of world will help support its growth initiative to broaden global distribution of the firm’s products and services. American Century and Nomura have minimal overlap in investment strategies/products and regional coverage, which will allow both companies to benefit from each firm’s respective resources, expertise and client relationships. Beyond the minority investment, Nomura and American Century Investments have agreed to strategically explore ways to enhance their asset management businesses globally.
“Nomura is honored to enter into a long-term relationship with American Century – a proven and successful investment management company, and an organization which has stated its commitment to making a difference in the community through its Profits With a Purpose philosophy,” said Koji Nagai, Nomura Group CEO. “Nomura’s partnership with American Century will bring value to both firms and the deal represents Nomura’s continuing ambition to put clients at the center of everything it does while connecting markets east and west,” he added.
“Nomura respects the value of American Century’s corporate philosophy and we believe that we are entering into a relationship with an outstanding long-term partner on the strength of our similar cultures, a shared investment outlook and a common set of values,” said Kunio Watanabe, CEO of Nomura Asset Management.
American Century’s business partnership with Nomura brings together a leading U.S. investment firm managing $149.3 billion in assets and one of Asia’s top financial institutions. Headquartered in Tokyo, Nomura has nearly 29,000 employees serving clients around the world. Its primary lines of business include retail investment services, fixed-income and equities trading, merger-and-acquisition advisory services, merchant banking and asset management. With approximately ¥103 trillion ($858 billion) in client assets, Nomura is one of the largest financial services firms in Japan. Nomura Asset Management maintains approximately 24 percent of Japan’s retail investment market, making the firm the largest distributor of investment products and mutual funds in Japan.
Upon completion of the transaction to purchase American Century shares currently held by CIBC, Nomura will name two representatives to American Century’s 11-person board of directors. Also, Nomura will have a 10.1 percent voting interest. CIBC has held a non-controlling equity interest in American Century since August 2011, when it purchased a 41 percent stake. For the current transaction, American Century was advised by Perella Weinberg Partners, LP and Clifford Chance.
Nomura is an Asia-based financial services group with an integrated global network spanning more than 30 countries. By connecting markets East & West, Nomura services the needs of individuals, institutions, corporations and governments through its three business divisions: Retail, Asset Management and Wholesale (Global Markets and Investment Banking). Founded in 1925, the firm is built on a tradition of disciplined entrepreneurship, serving clients with creative solutions and considered thought leadership. Nomura’s subsidiaries in the U.S. include Nomura Securities International, Inc. (a member of SIPC) and Nomura Corporate Research and Asset Management Inc.
American Century Investments is a leading privately held investment management firm, committed to delivering superior investment performance and building long-term client relationships since its founding in 1958. Based in Kansas City, Missouri, the firm offers a broad, diversified set of actively managed investment capabilities and solutions to clients across the globe. Delivering investment results to clients enables American Century Investments to distribute over 40 percent of its profits to the Stowers Institute for Medical Research, a 500-person, non-profit basic biomedical research organization. The Institute is the controlling owner of American Century Investments and has received dividend payments totaling over $1 billion since 2000.
The Stowers Institute for Medical Research is a non-profit, basic biomedical research organization dedicated to basic research – the critical first step in the quest for new medical diagnostics, therapies and treatments. Jim Stowers, founder of American Century Investments, and his wife, Virginia, opened the Institute in 2000. Since then, the Institute has spent over one billion dollars in pursuit of its mission. Currently, the Stowers Institute is home to 500 researchers and support personnel, over 20 independent research programs, and more than a dozen technology development and core facilities.