Dai-ichi Life and M&G establish strategic partnership

Dai-Ichi Life Holdings and M&G announced a new long-term strategic partnership across asset management and life insurance.

M&G, one of the leading international active asset managers and asset owners, will become Dai-ichi Life HD’s preferred asset management partner in Europe. This partnership will be focused on growth, distribution and product development opportunities, with the goal of delivering substantial new business flows for both M&G and Dai-ichi Life HD.

Consistent with M&G’s strategy to deliver asset management and international growth, the strategic partnership with Dai-ichi Life HD will accelerate M&G’s expansion in European private markets, while opening new potential sources of business flows in Japan and across Asia. M&G expects the partnership to drive improved long-term new business flows and to support growth in Adjusted Operating Profit.

M&G will support Dai-ichi Life HD’s access to public and private markets capabilities in Europe, for Dai-ichi Life HD’s own investment requirements as well as the needs of its customers. Dai-ichi Life HD highly values the strong life insurance capabilities of M&G and, as part of the partnership, will work closely with M&G to enhance its own expertise in bulk purchase annuities.

Dai-ichi Life HD intends (subject to regulatory approvals) to acquire a shareholding of 15% in M&G plc.

Under the terms of the arrangement:

• The partnership is expected to generate at least $6 billion in new business flows into funds managed by M&G over the next five years, of which at least $3 billion is intended to be in M&G’s market-leading high-alpha strategies across public and private markets;
• Of the $6 billion new business flows, half is expected to come from Dai-ichi Life HD’s balance sheet, on an evergreen basis. The other half will come from joint development opportunities, such as the distribution of M&G products by Dai-ichi Life HD;
• Similarly, the partnership is expected to generate at least $2 billion in new business flows for Dai-ichi Life HD over five years, through a combination of balance sheet investments in, or distribution of, asset management products offered by Dai-ichi Life HD’s subsidiaries, and through Dai-ichi Life HD’s distribution of jointly developed products;
• Dai-ichi Life HD will also consider distributing M&G products in Japan and Asia, as well as working together to develop new products;
• Dai-ichi Life HD and M&G will also consider collaboration in life insurance in Europe and Japan; and
• Dai-ichi Life HD and M&G will pursue opportunities to co-invest in new asset management capabilities, in line with their respective asset allocation needs and growth priorities.

“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. M&G possesses not only a reputable and long-established life insurance business, but comprehensive asset management solutions in both public and private markets. With this alliance, we are bringing together our respective capabilities to create a mutually beneficial partnership that will create value over the long-term.” – Tetsuya Kikuta, President and CEO of Dai-ichi Life HD.

“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. It brings together two highly complementary international businesses with shared growth ambitions who aim to deliver excellent client service and sustainable shareholder returns. It will enable us to further capitalise on the significant private market opportunities across Europe and enable even greater access to the Japanese and Asian market where we will benefit from Dai-ichi Life Holdings market-leading expertise.” – Andrea Rossi, Group CEO of M&G.