UK-based private equity firm CVC Capital Partners has agreed to acquire a majority stake in Affin Hwang Asset Management for a cash consideration of 1.54 billion ringgit (US$367 million).
Under a conditional share sale and purchase agreement, Affin Bank’s subsidiary Affin Hwang Investment Bank and key management shareholders will transfer their entire 68.35% stake in the asset management firm to Starlight Asset Sdn Bhd, an investment holding company incorporated by funds managed by CVC Capital Partners.
The transaction values Affin Hwang AM at 2.25 billion ringgit based on 100% equity interest, Affin Hwang Investment Bank says in a bourse filing.
According to the statement, the group will channel the gains from the deal towards working capital requirements to grow its core banking business. "This disposal is very much in line with our plans to focus and grow our banking business and expand our loan portfolio which we can leverage 10 times from the gains of the divestment," it adds.
As of December 31 2021, Affin Hwang Asset Management and its wholly-owned Islamic fund management arm AIIMAN Asset Management have a combined 81 billion ringgit in assets under administration. The firm has been recognized by The Asset Triple A Fund Management Awards as the Asset Management Company of the Year for Malaysia in 2021, 2020, 2018, and 2017.
"This marks our sixth investment in Malaysia since 2007, bringing our total capital invested to over US$1 billion. We remain confident in the strong economic fundamentals of the country, and believe this investment is an important opportunity for us to contribute to the continued development of Malaysia’s asset management industry and capital markets, as well as to grow Malaysia into the region’s leading asset management hub,” says Alvin Lim, senior managing director at CVC.
The deal is expected to be completed in the third quarter of 2022, subject to customary closing conditions, including regulatory approvals.