Italian insurance and asset management provider Generali has announced the acquisition of global asset manager Conning from Cathay Life, which is a subsidiary of Cathay Financial.

Upon the closing of the deal, Cathay Life will become a minority shareholder of Generali Investments.

At closing, Generali Investments will hold the majority of the asset management activities of Generali, barring certain operations, specifically those in China.

Subject to customary closing adjustments, Cathay Life is anticipated to own a stake of 16.75% of the share capital of Generali Investments at closing.

Besides, Cathay Life has entered into an asset management agreement for a minimum of 10 years with Generali’s expanded asset management business.

Furthermore, Generali and Cathay Life have agreed to certain earn-out provisions which could become payable in cash starting from three years after the closing of the transaction. This will be based on achieving certain pre-agreed terms, said Generali.

According to Generali, there is no upfront cash consideration payable by the firm or Generali Investments to Cathay Life.

Conning and its affiliates cater to the needs of insurance companies as well as institutional clients with about $157bn in assets under management.

The business includes Conning, Octagon Credit Investors, Global Evolution, and Pearlmark that engage in insurance and institutional fixed-income, bank loans, collateralised loan obligations (CLOs), emerging markets debt, specialty credit, and debt and equity real estate.

Conning CEO Woody Bradford said: “This is a highly complementary business combination that presents exceptional long-term opportunities for Conning and its affiliates – maintaining our firm’s ability to provide performance and service to our clients while extending our global investment capabilities.”

The acquisition is expected to bolster Generali asset management’s strategy by creating a combined platform with $709bn in assets under management.

Post acquisition, Generali’s assets under management will increase to $845bn.

Generali Group CEO Philippe Donnet said: “Through the acquisition of Conning and the long-term partnership with Cathay Life, we will enhance our asset management capabilities, strengthen our footprint in the key US and Asian markets, and create a platform to deliver on our broader asset management strategic ambitions in order to maximise value for all stakeholders, including Generali’s insurance business.”

The deal, which is subject to customary regulatory, anti-trust, and other approvals, is anticipated to be closed in the first half of 2024.