Nomura Acquires Macquarie's US, Europe Asset Management for $18B Amid Market Volatility

Nomura Holdings Inc. has made a bold move by acquiring the public asset management business of Macquarie Group Ltd. in the United States and Europe for 18 billion dollars. This acquisition, the largest since Nomura's 2008 purchase of Lehman Brothers' assets, brings in approximately 1800 billion dollars in client assets, primarily from the United States. The deal comes at a time when the U.S. market has been under selling pressure due to trade tensions and political uncertainties.

Christopher Wilcock, the chairman of Nomura Investment Management, emphasized the firm's commitment to its clients by stating that the acquisition aligns with their advice to hold investments during short-term market volatility. He noted that the deal reflects the current market conditions and is a strategic move to diversify Nomura's business away from its reliance on domestic retail and investment banking services. The acquisition includes assets in equities, fixed income, and multi-asset strategies, with approximately 90% of the assets originating from the United States.

Wilcock highlighted that despite recent market turbulence, the U.S. remains the world's largest asset management market. He also mentioned that Nomura had evaluated at least 20 potential acquisition targets and may consider additional transactions to further expand this platform. The acquisition is seen as a strategic move to create stable income streams and reduce dependence on volatile revenue sources.

The acquisition is not without its challenges. Jay Ritt, a finance professor, noted that Nomura is not a well-known brand in the U.S. and that the asset management industry is highly competitive, especially with the shift towards passive investing. However, he acknowledged that the acquisition poses a relatively low risk due to the stable nature of the assets and the fact that they are less prone to daily fluctuations compared to investment banking and trading activities.

Wilcock expressed optimism about the U.S. and global economic fundamentals, despite the current political climate and market volatility. He believes that the market will eventually find a balance, although short-term uncertainties will persist. He also noted that Japanese investors are unlikely to suddenly withdraw their overseas assets, given the long-term nature of their investments and the lack of viable alternatives.

The acquisition comes at a time when Nomura is preparing to announce its fourth-quarter financial results for the fiscal year. Wilcock, who also oversees the wholesale business unit responsible for investment banking and trading, sees further market volatility as an opportunity to capitalize on market mispricings. He cited Japanese government bonds as an example, noting that the company has sufficient capital to seize market opportunities while providing liquidity to clients.

Wilcock remains optimistic about the trading outlook, particularly in Japan, where trends such as the unwinding of cross-shareholdings and corporate governance reforms continue to drive trading activity. He acknowledged that sustained market volatility and uncertainty could negatively impact the trading environment but emphasized that Nomura is well-positioned to navigate these challenges.