TOKYO -- Nippon Life Insurance will buy a 24.75% stake in U.S. asset manager TCW, the Japanese mutual company said Friday, looking to take its overseas asset management to the next level amid poor returns at home.
Nippon Life has not disclosed the purchase price, but it is seen at around $500 million. The insurer will acquire the shares from U.S. fund manager Carlyle Group, which bought roughly 60% of TCW from France's Societe Generale in 2013. Carlyle's ownership will drop to 31.18% when the sale is complete.
Los Angeles-based TCW has strength in fixed-income funds, with more than 80% of its $191.6 billion in managed assets allocated to U.S. government debt.
The Japanese insurer will send two directors to TCW and exchange personnel to share investment know-how. The American company will manage some of Nippon Life's assets and mutually supply investment products with other asset management companies under the life insurer's umbrella.
Nippon Life's aims to raise net income from group companies to 70 billion yen ($621 million) in fiscal 2020, up roughly 60% from the year that ended in March.
In addition to subsidiary Nissay Asset Management, Nippon Life has a U.S. joint venture with local asset manager Putnam Investments. Seeking income growth beyond Japan's ultralow interest rates, the company also invested in India's Reliance Capital -- part of Anil Ambani's Reliance Group -- in 2012 and U.S.-based Post Advisory Group in 2013.
Other Japanese life insurers have bolstered their asset management operations overseas as well. Dai-ichi Life Holdings invested in Janus Capital Group, now Janus Henderson Investors, in 2013.