(Bloomberg) -- Nippon Life Insurance Co. has done more than $12 billion of deals this month alone. Japan’s biggest insurer isn’t finished yet.
Having committed to pouring billions into a pair of global insurers, the Osaka-based company is now turning to asset managers, as it seeks to diversify business at home and abroad. One of those is TCW Group Inc.
Nippon Life is seeking to obtain a majority stake in the Los Angeles-based firm as the foundation of its global asset management expansion, President Hiroshi Shimizu said. It already has about a 27% stake in TCW, which is also 34.2% owned by private equity powerhouse Carlyle Group Inc. and the rest by management and employees.
“We are talking with Carlyle and TCW, with us having a majority as an option,” Shimizu said in an interview. In addition to TCW, he said his company is also looking for “various opportunities” in its asset management buildup.
Nippon Life and other Japanese financial firms such as Mitsubishi UFJ Financial Group Inc. are ramping up overseas as the country’s shrinking and aging population poses challenges to their growth trajectory. With the recent string of deals, Nippon Life has already spent ¥2 trillion ($13 billion) earmarked for acquisitions through 2026, and the company has said it envisions an additional ¥2 trillion for growth outlays through 2035.
Shimizu said TCW needs to improve its value by boosting its performance before the Japanese insurer can buy the stake from Carlyle. “I don’t think Carlyle can sell its stake unless it can realize returns that are satisfactory to its investors,” he said.
TCW, which manages about $200 billion of client assets and has a long track record of overseeing bond funds, is expanding into the private credit market as part of its growth strategy.
Earlier this month, Nippon Life said it committed up to $3.25 billion to TCW’s private credit strategies. The insurer also said it will invest an additional $550 million in the asset manager.
“By contributing the money from Nippon Life, we want to accelerate its growth in private credit,” Shimizu said.
Shimizu, 63, who been president since 2018, will step down to become chairman on April 1. Executive Vice President Satoshi Asahi, 61, will take his role.
Shimizu has spent all of his professional career at Nippon Life. As a certified actuary, he rose through the ranks in the finance, product development and strategic planning sections. He led the talks when the company agreed on its initial investment in TCW in 2017.
Nippon Life has been on a spending spree this year.
Earlier this month, it agreed to buy Bermuda-based Resolution Life Group Holdings Ltd. for about $8.2 billion in the biggest takeover by a Japanese insurer. It also completed the acquisition of a 21.6% stake in Houston-based Corebridge Financial Inc. for $3.8 billion from American International Group Inc.
At home, it bought nursing and child care provider Nichii Holdings for ¥210 billion this year. The company is looking for further acquisition opportunities in non-insurance businesses in Japan as part of its diversification strategy, Shimizu said in the interview.
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Nippon Life is Japan’s largest life insurer, with more than $600 billion in assets. The unlisted firm is owned by its insurance policy holders. Meiji Yasuda Life Insurance Co. and Sumitomo Life Insurance Co. are also mutual companies.
Among Japan’s top life insurers, Dai-ichi Life Holdings Inc. is listed with a market value of about ¥4 trillion.
Shimizu said Nippon Life has no intention to become a publicly traded stock company, pointing out that it doesn’t need to raise equity financing.
“My impression is activist shareholders’ demands are further leaning on short-term results nowadays,” he said. “As a mutual company, we can run the business with a long-term view.”
With that perspective in mind, Shimizu said the yen’s depreciation won’t dampen the company’s acquisition drive.
“We’re not buying and selling businesses in a short period of time,” he said. “We intend to have them for 20 or 30 years.”
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