Nippon Life Ramps Up Global Push With $550 Million TCW Deal

(Bloomberg) — Nippon Life Insurance Co. said it will invest an additional $550 million in US asset management firm TCW Group Inc., as it embarks on a buying spree to accelerate global expansion.

Japan’s largest insurer by assets, which already owns about 27% of TCW, will buy $250 million worth of convertible notes and $300 million of preferred securities issued by the money manager, the Osaka-based company said in a statement Thursday. The convertible notes will give Nippon Life as much as 10% of an additional stake after three years, according to a company spokeswoman. 

Nippon Life will also commit up to $3.25 billion to TCW’s private credit strategies, the statement said. TCW is trying to expand into private credit and the Japanese insurer’s funding commitment is designed to help that effort as an anchor investor, the spokeswoman added. 

The announcement comes just a day after Nippon Life agreed to buy Bermuda-based Resolution Life Group Holdings Ltd. for about $8.2 billion in the biggest takeover by a Japanese insurer. Earlier in the week, Nippon Life completed the acquisition of a 21% stake in Houston-based Corebridge Financial Inc. for $3.8 billion from American International Group Inc.

Los Angeles-based TCW, with $202.8 billion of assets under management, was about 34.2% owned by Carlyle Group, according to the statement. TCW management and employees held about 38.6%. Nippon Life first bought a stake in TCW from Carlyle in 2017.

President Hiroshi Shimizu is seeking more acquisitions at home and abroad to diversify beyond the firm’s traditional domestic life businesses. 

The unlisted Nippon Life has funding for more deals even as the recent transactions will use up all of its ¥2 trillion war chest set aside for growth spending through 2026, Shimizu said at a news conference on the Resolution Life acquisition on Wednesday.

“We still have some more room as our business performance has been better than initially expected,” he said. Nippon Life has also said it envisions ¥4 trillion in growth investment through 2035, including the ¥2 trillion already spent.

The company’s track record for overseas acquisitions is mixed, however. 

In 2016, Nippon Life bought National Australia Bank Ltd.’s life insurance unit for A$2.2 billion ($1.4 billion). The Japanese company had to make multiple rounds of additional capital injections to prop up the unit’s financial health after it suffered losses following the acquisition.  

Nippon Life said this week that it will purchase a 20% stake in the Australian unit, MLC Ltd., from NAB for about A$500 million to make it a wholly owned subsidiary.

(Updates with Nippon Life comment on its private credit commitment in third paragraph and growth spending budget from sixth.)

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