Mitsubishi UFJ Financial Group Inc. (8306) is seeking to add more investment bankers on secondment from its partner Morgan Stanley to help cement its spot as Japan’s top adviser on mergers and acquisitions.
About 100 employees from the Wall Street firm already work at Mitsubishi UFJ Morgan Stanley Securities Co., Takashi Nagaoka, chief executive officer of the joint venture, said in an interview on Aug. 6, without saying how many more he’d like to tap. The firm, which has 450 investment-banking staff, is also considering adding 30 to 50 positions to cope with a recent increase in business, Nagaoka said.
The four-year-old venture between Japan’s biggest bank and the U.S. firm is the No. 1 adviser on mergers in the Asian nation this year, after topping the rankings for the first time in 2013. It advised Suntory Holdings Ltd. on its $15.9 billion purchase of U.S. distiller Beam Inc., the country’s biggest takeover so far in 2014, as Japanese companies expand abroad to counter a declining population and slow economic growth.
“More Japanese firms can enter world markets as they have high-quality products and technology,” Nagaoka, 60, said in Tokyo. “We want to boost the number of workers from Morgan Stanley (MS:US) as Japanese corporates seek more growth opportunities.”
Ties between the banks deepened after Mitsubishi UFJ invested $9 billion in Morgan Stanley during the peak of the global financial crisis in 2008. The banks set up two brokerages two years later, and have an arrangement that allows Mitsubishi UFJ to borrow staff (MS:US) from the U.S. firm.
Mitsubishi UFJ Morgan Stanley advised on 21 takeover deals in Japan this year valued at $26.5 billion, according to data compiled by Bloomberg. Morgan Stanley, which counts Mitsubishi UFJ as its largest shareholder, is second among advisers on takeovers worldwide, trailing only Goldman Sachs Group Inc., the data show.
“We want to operate our M&A business in a way that ensures we take a permanent place as the top adviser,” said Nagaoka, who became president in June. “Our M&A team is very busy, so we want to add people.”
Shares of Mitsubishi UFJ fell 3.3 percent to 572.3 yen at the lunch break in Tokyo as the benchmark Topix Index (TPX) retreated 2.5 percent. The stock has dropped 18 percent this year.
Mitsubishi UFJ Morgan Stanley is fourth among managers of Japanese share sales this year, trailing Nomura, SMBC Nikko Securities Inc. and Daiwa Securities Group Inc. The venture is working on an initial public offering by Line Corp., operator of Japan’s most popular mobile messaging service.
Morgan Stanley MUFG Securities Co., the other joint venture between the banks, was the most profitable foreign securities firm in Japan in the year ended March as a stock-market rally boosted fees and commissions. The firm had net income of 30.6 billion yen ($299 million), the highest among 11 global banks operating in the country, regulatory filings showed.
Mitsubishi UFJ Morgan Stanley’s profit more than doubled to 121.1 billion yen last fiscal year from 56.1 billion yen.
Nagaoka was deputy president at Bank of Tokyo-Mitsubishi UFJ Ltd. before his current job. He joined Mitsubishi Bank Ltd. in 1976 after graduating from Keio University in Tokyo, and became head of equity capital markets in 2000.
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