Nippon Life to Acquire Stake in Money Manager TCW From Carlyle

Nippon Life is one of Principal Financial's biggest shareholders

(Image: Thinkstock) (Image: Thinkstock)

Nippon Life Insurance Co. agreed to buy a minority stake in TCW Group Inc. from Carlyle Group LP to strengthen its asset management operations and diversify revenue sources.

The Japanese insurer will acquire 24.75% of the Los Angeles-based money manager, it said in a statement in Tokyo on Friday, without disclosing financial terms. Carlyle, a private equity firm, will keep a 31.18% stake. The deal is valued at around 55 billion yen ($490 million), a person with knowledge of the matter said.

Nippon Life has been buying companies abroad as Japan’s declining population and low interest rates damp prospects at home. It was the third-largest shareholder of Des Moines, Iowa-based insurer Principal Financial Group Inc. as of September, with a 6.3% stake, according to data compiled by Bloomberg. The Japanese insurer bought a majority stake in Australia’s MLC Ltd. for A$2.2 billion ($1.7 billion) in 2015.

(Related: Jack Ma-Backed Yunfeng to Buy MassMutual Unit for $1.7 Billion

Washington-based Carlyle bought 60% of TCW from Societe Generale SA in 2013, ending more than a decade of ownership by the French bank. The deal valued TCW at $780 million, according to a presentation at the time. After Nippon Life completes its transaction, TCW management and employees will own 44.07% of the firm, the insurer said.

Formed in 1971, TCW has $192 billion under management, Nippon Life said in the statement. Under Carlyle’s majority ownership, TCW expanded its alternatives business and worked with the buyout firm to offer vehicles that give ordinary investors access to hedge fund-like bets.

—With assistance from Cathy Chan, Melissa Mittelman and John Gittelsohn.

—Read National Australia Plans Insurance Tie-Up With Nippon Life  on ThinkAdvisor.

— Connect with ThinkAdvisor Life/Health on Facebook and Twitter.

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