Nippon Life Insurance agreed to buy a minority stake in TCW from Carlyle Group to strengthen its asset management operations and diversify revenue sources.

The Japanese insurer will acquire 24.75% of the Los Angeles-based money manager, it said in a statement in Tokyo on Friday, without disclosing financial terms. Carlyle will keep a 31.18% stake. The deal is valued at around $490 million, a person with knowledge of the matter said.

After Nippon Life completes its transaction, TCW management and employees will own 44.07% of the firm, the insurer said.
After Nippon Life completes its transaction, TCW management and employees will own 44.07% of the firm, the insurer said. Bloomberg News

Nippon Life has been buying companies abroad as Japan’s declining population and low interest rates damp prospects at home. It was the third-largest shareholder of Des Moines, Iowa-based insurer Principal Financial 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 for $1.7 billion in 2015.

Washington-based Carlyle bought 60% of TCW from Societe Generale in 2013, ending more than a decade of ownership by the French bank. The deal valued TCW at $780 million, according to a presentation at the time. After Nippon Life completes its transaction, TCW management and employees will own 44.07% of the firm, the insurer said.

Formed in 1971, TCW has $192 billion under management, Nippon Life said in the statement. Under Carlyle’s majority ownership, TCW expanded its alternatives business and worked with the buyout firm to offer vehicles that give ordinary investors access to hedge fund-like bets.

Bloomberg News