Dai-ichi Life Holdings (Dai-ichi Life HD) and M&G have entered a long-term strategic partnership spanning asset management and life insurance.
As part of the arrangement, Dai-ichi Life HD plans to acquire approximately 15% of M&G plc’s shares, subject to regulatory approvals. The stake is expected to be purchased through on-market transactions, with no impact on M&G’s issued share capital.
Following the acquisition, Dai-ichi Life HD will have the right to appoint a director to the M&G Board, conditional on maintaining at least a 15% shareholding.
The market responded positively to the announcement, with M&G’s share price rising by over 8%, reaching its highest point since June 2021. Under the terms of the partnership, M&G will become Dai-ichi Life HD’s preferred asset management partner in Europe.
The partnership is part of Dai-ichi Life HD’s broader strategy of international expansion. Recent moves by the company include increasing its stake in Capula Investment Management and acquiring a 15.1% interest in Australian investment manager Challenger.
The alliance is intended to support M&G’s strategy for expanding its presence in European private markets and is expected to provide new channels for business flows from Japan and across Asia. M&G anticipates that the partnership will contribute to growth in adjusted operating profit over the long term.
For the 2024 financial year, M&G reported an adjusted operating profit before tax of £837 million, an increase from £797 million the previous year. The growth was attributed to the performance of its asset management division, highlighting the firm's momentum ahead of the new partnership.
In parallel, M&G will assist Dai-ichi Life HD by offering access to its public and private market capabilities across Europe, catering to both Dai-ichi Life HD’s investment requirements and those of its customers. The partnership also involves efforts to enhance Dai-ichi Life HD’s expertise in bulk purchase annuities through close cooperation with M&G.
M&G operates across several business segments, including M&G Wealth, which manages its wealth platform offerings, and M&G Investments, which handles its investment funds.
Additionally, its insurance products are marketed under the Prudential brand, providing a comprehensive suite of services across wealth management, investments, and insurance.
Andrea Rossi (pictured above), group chief executive of M&G, commented that the partnership and associated investment represent recognition of M&G’s strengths and confidence in its leadership and strategy.
“It will enable us to further capitalise on the significant private market opportunities across Europe and enable even greater access to the Japanese and Asian market where we will benefit from Dai-ichi Life Holdings market-leading expertise,” Rossi said.
The partnership is projected to deliver at least $6 billion in new business flows into M&G-managed funds over the next five years. Of this amount, at least $3 billion is intended for M&G’s high-alpha strategies in both public and private markets.
Half of the anticipated $6 billion inflow is expected to originate from Dai-ichi Life HD’s balance sheet on an evergreen basis, with the remaining half derived from joint development initiatives, including the distribution of M&G products by Dai-ichi Life HD.
Additionally, the partnership is expected to generate at least $2 billion in new business flows for Dai-ichi Life HD over five years. This will include balance sheet investments in asset management products offered by Dai-ichi Life HD subsidiaries and the distribution of jointly developed products.
Both firms are considering further collaboration opportunities, including the distribution of M&G products in Japan and Asia, development of new products, and potential cooperation in life insurance in Europe and Japan. The companies also plan to explore joint investments in new asset management capabilities aligned with their respective asset allocation requirements and growth objectives.
Tetsuya Kikuta, president and chief executive of Dai-ichi Life HD, said Dai-ichi Life Holdings is entering into a strategic alliance with M&G to collaborate and build capabilities, particularly in Europe.
“We see our partnership with M&G acting as a spearhead to develop our presence across Europe and the UK, accelerating our strategy to become a global top-tier insurance group,” Kikuta said. “M&G possesses not only a reputable and long-established life insurance business, but comprehensive asset management solutions in both public and private markets.”
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