Toyo Trust & Banking Co. and Meiji Life Insurance Co. are nearing a decision to join a planned alliance between Nippon Life Insurance Co. and Mitsubishi Trust & Banking Corp. in the so-called “master trust” business, informed sources said Friday.
Deutsche Bank, the world’s largest bank, is also thinking of joining, they said.
The three financial institutions are expected to announce their decisions as early as Monday.
Nippon Life and Mitsubishi Trust agreed in principle earlier this month to enter a master trust arrangement that will provide unified administration services for corporate fund assets.
If realized, the five financial institutions will set up a new bank specializing in asset management to take over their respective fund management operations, the sources said.
The move would further accelerate competition in the trust management business, observers said. Sumitomo Trust & Banking Co. and Daiwa Bank also plan a joint bank specializing in asset management.
In announcing his firm’s midterm earnings report Friday, Toru Sugiura, managing director of Meiji Life, said his firm may buy into the joint company proposed by Nippon Life and Mitsubishi Trust.
He also said Meiji Life plans to increase investment in Japanese bonds for the October-March second half while keeping investment in real estate and foreign stocks unchanged.
Master trusts break up asset management and pension plan administration, thereby allowing a single company — such as an insurer or a trust bank — to concentrate on management of corporate pension fund assets and their returns.
The nation’s trust banking law has long banned corporate pension funds from entrusting management to a single administrator. But the Health Ministry is leaning toward removing the ban in view of calls from corporate pension funds, which want to grasp at a single glance the overall investment performance of the assets they have entrusted.
In a master trust arrangement, the single firm administers pension fund assets by keeping track of the securities and cash deposits that a corporate pension fund has entrusted various management firms to invest, while overseeing reports of investment management firms.
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