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UBS Mulls JV With India's 360 One WAM to Expand Wealth Management
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According to a Reuters report, UBS Group AG (UBS - Free Report) is in discussions to form an Indian wealth management joint venture (JV) with 360 One WAM, a Mumbai-based firm, formerly known as IIFL Wealth Management.
UBS is in preliminary discussions with 360 One WAM to acquire around 26% stake in the JV. The deal is expected to be finalized in the upcoming months.
This potential JV is expected to expand UBS’ Indian wealth management business to high-net-worth individuals in addition to its existing ultra-high-net-worth individuals.
Rationale Behind UBS Group’s Expansion in India
India's wealth management sector is witnessing exponential growth and transformation, driven by robust economic expansion and an ongoing market rally. In 2023, the country’s wealth management industry was valued at $429 billion and is expected to witness a four-year (2025-2029) compound annual growth rate of 4.6%, according to TechSci Research data released in January 2024.
Image Source: TechSciResearch
As of June 30, 2024, UBS had approximately $4 trillion worth of invested assets, while 360 One WAM had around $62.3 billion in assets. UBS considers the Indian market to be crucial for its future growth prospects, and a potential JV with 360 One WAM could provide significant local expertise. This will help the Swiss banking giant to capitalize on the growing opportunities in the wealth management sector in the country.
UBS’ Expansion Strategy in the APAC Region
UBS Group has strengthened its presence in India by integrating Credit Suisse's local operations. Credit Suisse was acquired by UBS Group as a Swiss government-engineered rescue last year.
This merger helped UBS expand its operational footprint and increase its client base in the country. The potential JV with 360 One is a strategic move in the same direction, marking an important step in UBS’ plans to strengthen its influence in the region.
If the JV comes into existence, India will become the second country in the APAC region, where UBS will enter into an equity partnership with a local company. In 2019, the company formed a JV with Japan’s Sumitomo Mitsui Trust, where the majority of the stake is owned by UBS. This venture in Japan was aimed at enhancing wealth management services for wealthy and ultra-wealthy clients, a strategy UBS aims to replicate in India.
Like UBS, JPMorgan Chase & Co. (JPM - Free Report) and Mitsubishi UFJ Financial Group, Inc. (MUFG - Free Report) are also undertaking initiatives to expand in the Asian markets. JPM intends to grow its corporate banking team across Asia in 2025 to capitalize on increasing business prospects from intra-Asia trades, the innovation economy and payment services. This was stated by Oliver Brinkmann, Asia-Pacific co-head of global corporate banking at the company, in an interview with South China Morning Post last week.
In June 2024, MUFG and its consolidated subsidiary, MUFG Bank, signed an investment agreement for $195 million in Ascend Money, along with the Finnoventure Private Equity Trust I fund. This investment supports MUFG’s strategy to expand its commercial banking business in the APAC region, its second home market.
Prior Efforts to Enhance Wealth Business by UBS
In a move to improve its services for ultra-wealthy clients, UBS announced a realignment of its wealth management business. In July, the company established a new division known as GWM Solutions to consolidate different products for clients. This unit offers services that include investment management, lending, family and institutional wealth management and alternative investments.
Such moves to enter rapidly growing markets and transform its flagship business will enable the bank to stay ahead of the competitors and capitalize on the growth opportunities.
Shares of UBS have gained 1.8% on the NYSE over the past six months compared with the industry’s growth of 9.6%.
Image: Shutterstock
UBS Mulls JV With India's 360 One WAM to Expand Wealth Management
According to a Reuters report, UBS Group AG (UBS - Free Report) is in discussions to form an Indian wealth management joint venture (JV) with 360 One WAM, a Mumbai-based firm, formerly known as IIFL Wealth Management.
UBS is in preliminary discussions with 360 One WAM to acquire around 26% stake in the JV. The deal is expected to be finalized in the upcoming months.
This potential JV is expected to expand UBS’ Indian wealth management business to high-net-worth individuals in addition to its existing ultra-high-net-worth individuals.
Rationale Behind UBS Group’s Expansion in India
India's wealth management sector is witnessing exponential growth and transformation, driven by robust economic expansion and an ongoing market rally. In 2023, the country’s wealth management industry was valued at $429 billion and is expected to witness a four-year (2025-2029) compound annual growth rate of 4.6%, according to TechSci Research data released in January 2024.
Image Source: TechSciResearch
As of June 30, 2024, UBS had approximately $4 trillion worth of invested assets, while 360 One WAM had around $62.3 billion in assets. UBS considers the Indian market to be crucial for its future growth prospects, and a potential JV with 360 One WAM could provide significant local expertise. This will help the Swiss banking giant to capitalize on the growing opportunities in the wealth management sector in the country.
UBS’ Expansion Strategy in the APAC Region
UBS Group has strengthened its presence in India by integrating Credit Suisse's local operations. Credit Suisse was acquired by UBS Group as a Swiss government-engineered rescue last year.
This merger helped UBS expand its operational footprint and increase its client base in the country. The potential JV with 360 One is a strategic move in the same direction, marking an important step in UBS’ plans to strengthen its influence in the region.
If the JV comes into existence, India will become the second country in the APAC region, where UBS will enter into an equity partnership with a local company. In 2019, the company formed a JV with Japan’s Sumitomo Mitsui Trust, where the majority of the stake is owned by UBS. This venture in Japan was aimed at enhancing wealth management services for wealthy and ultra-wealthy clients, a strategy UBS aims to replicate in India.
Like UBS, JPMorgan Chase & Co. (JPM - Free Report) and Mitsubishi UFJ Financial Group, Inc. (MUFG - Free Report) are also undertaking initiatives to expand in the Asian markets. JPM intends to grow its corporate banking team across Asia in 2025 to capitalize on increasing business prospects from intra-Asia trades, the innovation economy and payment services. This was stated by Oliver Brinkmann, Asia-Pacific co-head of global corporate banking at the company, in an interview with South China Morning Post last week.
In June 2024, MUFG and its consolidated subsidiary, MUFG Bank, signed an investment agreement for $195 million in Ascend Money, along with the Finnoventure Private Equity Trust I fund. This investment supports MUFG’s strategy to expand its commercial banking business in the APAC region, its second home market.
Prior Efforts to Enhance Wealth Business by UBS
In a move to improve its services for ultra-wealthy clients, UBS announced a realignment of its wealth management business. In July, the company established a new division known as GWM Solutions to consolidate different products for clients. This unit offers services that include investment management, lending, family and institutional wealth management and alternative investments.
Such moves to enter rapidly growing markets and transform its flagship business will enable the bank to stay ahead of the competitors and capitalize on the growth opportunities.
Shares of UBS have gained 1.8% on the NYSE over the past six months compared with the industry’s growth of 9.6%.
Image Source: Zacks Investment Research
Currently, UBS Group carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.