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Money Management

Nippon Life buys 25% stake in TCW Group from Carlyle

Nippon Life Insurance Co., Japan's largest private life insurance company, will purchase a 24.75% minority stake in TCW Group from the Carlyle Group, said a joint news release Friday.

Terms of the deal were not disclosed in the release. Under the transaction, which is expected to close by the end of 2017, TCW's employee ownership will also increase to 44.07%, up from 40% previously. Carlyle will maintain a 31.18% stake in the firm through its long-duration private equity fund, Carlyle Global Financial Services Partners, the release said.

In February 2013, Carlyle Global Financial Services Partners and Carlyle Partners V, a U.S. buyout fund, bought 60% of TCW for about $700 million. Carlyle Global Financial Services Partners was launched in 2008 and Carlyle Partners V was launched in 2007.

TCW has approximately $200 billion in assets under management across fixed income, equities, emerging markets and alternatives. As of Sept. 30, Carlyle had $174 billion in alternatives assets under management.

Nippon has total assets of approximately ¥65 trillion ($582 billion). The firm already offers investment management services through its subsidiaries and affiliates.

"Nippon Life has been working to strengthen our asset management business as one of our highest priorities, and thus, I am honored that an esteemed company like TCW welcomed us as a partner," said Yoshinobu Tsutsui, president of Nippon Life, in the release. "Over several years, both companies communicated closely together, visiting Los Angeles, New York, and Tokyo, and promoted various business collaborations and interactions. Through such communication, we were convinced that TCW has a great investment capability and philosophy that we would like to partner with. Based on this mutual trust, we would like to further deepen our partnership going forward."

David Lippman, president and CEO of TCW, added in the release: "In Nippon Life, we have found a partner that, like Carlyle, will enable us to maintain strong employee ownership, which aligns our interests with those of our clients and strengthens employee incentives, and, most importantly, will allow us to preserve our proven investment processes and philosophy so that we can continue to meet the investment objectives of our clients."

Nippon Life has been buying companies abroad as Japan's declining population and low interest rates dampen 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.

A Carlyle spokeswoman could not immediately be reached for additional information.

Bloomberg contributed to this story