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Massachusetts Mutual Life Insurance Co. is weighing a sale of asset manager OppenheimerFunds Inc., which could fetch at least $5 billion, according to people familiar with the matter.

The Springfield, Massachusetts-based insurer is working with advisers to evaluate a sale, a process that is at an early, informal stage, said the people, who asked not be identified because the matter isn’t public. No decision has been made and MassMutual could opt to hold onto the firm, they said.

(Related: MassMutual Acquires Quilt)

A representative for MassMutual declined to comment.

The potential sale comes as asset managers grapple with narrowing margins as fees fall and regulatory costs mount. Firms such as Oppenheimer that focus on actively managed funds have also been steadily losing business to so-called passive vehicles such as index funds, which are cheaper.

Those pressures have analysts expecting more industry consolidation as large and midsize money managers look for scale and diversity to boost sales.

MassMutual, which acquired OppenheimerFunds in 1990, has been shedding businesses and relocating employees around the U.S. as Chief Executive Roger Crandall seeks to reshape the firm. The life insurer is among the largest and most prominent in the U.S. that is owned by its policyholders rather than stockholders.

OppenheimerFunds managed more than $249 billion as of the end of July, according to its website. It specializes in mutual funds, but has been expanding into exchange-traded funds in recent years to diversify and boost fees.

—With assistance from Katherine Chiglinsky.

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