Thursday, December 14, 2017

Japanese life insurers seek to acquire global asset managers

Years of low interest rates and lacklustre returns at home have prompted Japanese life insurers to look abroad in their search for healthy yields.

Presently, they are seeing global asset managers as hot acquisition targets.

Nippon Life Insurance is just one of Japan’s life insurers aiming to lift profits by buying into global asset managers.

In September, the company won preferential negotiating rights to acquire up to 30% of US asset manager TCW group, an investment expected to be in the range of ¥50 billion to ¥100 billion (US$442.5 million to US$885 million).

Other Japanese insurers, Meiji Yasuda Life Insurance and Fukoku Mutual Life Insurance, have also partnered with US asset managers to handle some funds.

Their goal is to generate stable returns by tapping the partners’ expertise in managing foreign bonds.

The insurers are hoping that the effects of negative interest rates at home will be offset by asset managers’ higher returns and steady inflows of management fees.

 

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