Wed, Mar 16, 2005 - Page 10 News List

Cathay takes over five UBS funds

COOPERATION The partnership will enable Cathay to use UBS' overseas investment experience, while UBS will leverage Cathay's local distribution channels

By Amber Chung  /  STAFF REPORTER

Cathay Securities Investment Trust Co (國泰投信), the fund management arm of Taiwan's largest financial holding company Cathay Financial Holding Co (國泰金控), yesterday announced it would take over five domestic funds from UBS Global Asset Management Taiwan.

The takeover is expected to boost Cathay Securities Investment Trust's number of mutual funds to 16, worth over NT$68 billion, from the current NT$54 billion.

"[The move] is out of consideration for strategic cooperation," Peter Chiang (江志平), acting president of Cathay Securities Investment Trust, said in a phone interview yesterday.

As the second largest mutual fund manager in Europe, UBS has a wide range of products and strong product development capability, Chiang said. The partnership will allow Cathay to leverage UBS' overseas investment expertise while UBS can take advantage of Cathay's distribution channels to market their overseas funds, he added.

Cathay, for the time being, is not thinking about acquiring funds from other foreign investment trust firms to further expand, he said.

The Zurich-based UBS, meanwhile, said that after transferring the five domestic funds, the firm will focus on managing and marketing its two international mutual funds in Taiwan, according to Sean Chao (趙辛哲), chairman of UBS Global Asset Management Taiwan.

UBS will offer Cathay's domestic products to clients of its wealth management business in Taiwan and provide investment advisory services to Cathay in the future, Chao said.

In addition to product distribution and investment management, the two parties will extend cooperation into product development as well as education and training.

The deal is the second instance of a foreign mutual fund manager transferring its funds to a local firm. The first was the Taiwan funds of Zurich Securities Investment Trust, which were taken over by Taiwan Life Asset Management (台壽保投信) last May.

As of last month, the total scale of the nation's 467 mutual funds, managed by 45 domestic investment trust firms, reached NT$2.57 trillion, up 0.19 percent from January, according to figures released by the Securities Investment Trust and Consulting Association of the Republic of China (投信投顧公會) yesterday.

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