T. Rowe Price Associates plans to join the growing list of mutual fund companies entering the money management business in Japan.

The firm said last week that it will invest approximately $16 million for a ten percent interest in an asset management company it will create with Sumitomo Bank and Daiwa Securities Co. The new firm will be based in Tokyo and will have about $29 billion in assets which Sumitomo and Daiwa will contribute to the as yet unnamed entity.

Sumitomo is the second-largest bank in Japan, with more than $300 billion in deposits. Daiwa, the second-largest brokerage firm, is the largest seller of investment trusts, the Japanese equivalent of retail mutual funds. Together, Sumitomo and Daiwa have more than 475 branch offices in Japan.

The move represented an "important strategic, long-term investment" for the firm, said George Roche, president and chairman of T. Rowe Price, in a statement. The deal is not expected, however, to have a substantial effect right away on T. Rowe Price's earnings, Roche said.

T. Rowe Price's move follows those of a number of mutual fund companies including Putnam Investments, Liberty Financial Co. and Lord Abbett & Co. to build a presence in Japan or to join with Japanese partners. T. Rowe Price estimated Japan's personal financial market at $10 trillion.

In addition to the Sumitomo-Daiwa arrangement, T. Rowe Price will form a joint venture with Robert Fleming Holdings to manage non-Japanese security investments for Japanese investors. Another T. Rowe Price-Fleming joint venture Rowe Price-Fleming International, of London, is 20 years old and manages more than $30 billion.

Japanese legislators are considering new laws that would permit 401(k)-style retirement plans for Japanese employees. Through their joint ventures, the companies expect to pursue assets in that market if the legislation is approved.

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