Dai-ichi Life Holdings and UK-based investment manager M&G have partnered to enhance their asset management and life insurance operations.
Under the agreement, M&G will serve as Dai-ichi Life’s preferred asset management partner in Europe. The collaboration seeks to leverage growth, distribution, and product development opportunities to boost business flows for both entities.
The partnership aligns with M&G’s strategy to expand its asset management presence internationally. It is expected to accelerate M&G’s growth in European private markets and open new business avenues in Japan and Asia.
M&G anticipates the partnership will enhance long-term business flows and support growth in adjusted operating profit. The company will also assist Dai-ichi Life with access to public and private market capabilities in Europe to meet its investment needs and those of its clients.
Dai-ichi Life values M&G’s life insurance expertise and aims to enhance its own capabilities in bulk purchase annuities.
Dai-ichi Life plans to acquire approximately 15% of M&G, subject to regulatory approvals, to align interests and capture value from strategic initiatives.
The acquisition will be through on-market purchases, with no changes to M&G’s share capital. Dai-ichi Life will have the right to appoint a director to M&G’s Board as long as it maintains at least a 15% shareholding.
The partnership is projected to generate at least $6bn in new business flows into M&G-managed funds over five years, with $3bn targeted at high-alpha strategies. Half of these flows will come from Dai-ichi Life’s balance sheet, while the remainder will emerge from joint development opportunities.
Similarly, Dai-ichi Life expects to generate $2bn in new business flows over five years through balance sheet investments and the distribution of asset management products by its subsidiaries. Both companies will explore distributing M&G products in Japan and Asia and developing new products together.
The agreement includes provisions for co-investment in new asset management capabilities, aligning with their asset allocation needs. Dai-ichi Life will also consider distributing M&G products in Japan and Asia.
The partnership arrangement includes an Implementation Agreement detailing Dai-ichi Life’s ownership and governance rights, including appointing a director to M&G’s Board.
Dai-ichi Life has agreed to several contractual restrictions, such as a two-year lock-up on M&G shares after reaching the 15% threshold and a standstill restriction preventing the acquisition of more than 19.99% of M&G’s share capital.
An orderly market arrangement governs share disposals. Dai-ichi Life will have information rights related to its shareholding. The arrangement can be terminated if the parties are no longer strategically aligned.
Tetsuya Kikuta, President and CEO of Dai-ichi Life HD said: Dai-ichi Life HD president and CEO Tetsuya Kikuta said: “Dai-ichi Life Holdings is delighted to enter into a strategic alliance with M&G, a highly regarded global player in the insurance and asset management industries, to collaborate and develop capabilities together in multiple areas, especially in Europe.
“We see our partnership with M&G acting as a spearhead to develop our presence across Europe and the UK, accelerating our strategy to become a global top-tier insurance group.”
Andrea Rossi, Group CEO of M&G said: “The strategic partnership with Dai-ichi Life Holdings and the associated c.15% investment is recognition of M&G’s strengths and clear confidence in our leadership, strategy and long-term prospects.”
