Moelis strengthens Asian links with Sumitomo pact

Moelis, the independent US investment bank, has agreed an alliance with Japan’s Sumitomo Mitsui Banking Corporation.

People familiar with the matter said Moelis this week announced internally that it had agreed a non-exclusive partnership with Sumitomo, and its Nikko Cordial brokerage unit, to co-operate on providing global investment banking services to Japanese companies.

The alliance should allow Moelis to tap into Sumitomo’s relationships with corporate Japan, as well as offering their global clients better access to the Japanese market.

Sumitomo, through Nikko, has been increasing its investment banking staff globally. Nikko, Japan’s third largest brokerage, last year said it would add mergers and acquisitions bankers in New York, London, Hong Kong and Shanghai, taking aim at Nomura, the market leader in advising Japanese companies on dealmaking.

Sumitomo Mitsui Financial Group, which owns SMBC, is Japan’s second-largest bank by market value.

US bank Citigroup in 2009 sold Nikko Cordial to Sumitomo after taking full control of the business about two years before. The US bank has a strategic alliance agreement with SMFG, which remains in force.

Moelis’ deal with Sumitomo would not involve any investment between the two companies at this stage, people familiar with the deal said, and would focus on Japanese corporate clients. However, the pair could broaden the arrangement further down the line, they added.

Moelis declined to comment. Sumitomo Mitsui could not be reached for comment.

The agreement comes just weeks after the bank, founded in 2007 by Ken Moelis, said it would make its first acquisition in investment banking with the purchase of Asia Pacific Advisers, a Hong Kong-based firm.

Moelis has grown rapidly in the past four years and now boasts about 500 people. However, the group has a limited footprint in Asia and is focused on expanding there.

“The growth in the region speaks for itself,” Mr Moelis told the Financial Times in January, when announcing the APA deal. “We have to continue to be valuable to our clients, and as we build our network, we add information, knowledge and expertise that benefit all of them.”

The FT previously reported that the firm had held talks with up to a dozen potential partners across Asia, including in Japan, China and India, as well as other emerging markets such as Brazil, with a view to plugging gaps in its global reach.

It also earlier this year recruited the services of Lord Davies of Abersoch, the former chairman of Standard Chartered, as head of a new advisory board, hoping to tap into Lord Davies’ large network of contacts in emerging markets.