Dai-ichi Life and Mizuho Financial Group Merge Asset Management Units
October 6, 2015 by Iris Lai, Hong Kong bureau manager: Iris.Lai@ambest.com
TOKYO – Dai-ichi Life Insurance Co. Ltd and Mizuho Financial Group Inc. have agreed to integrate the two groups’ asset management units to jointly operate the new company, according to a statement from Dai-ichi Life.
The integration aims to combine the two group’s asset-management resources to jointly build an asset-management business platform “that is No. 1 in Asia as well as in Japan both in quality and size,” said Dai-ichi Life in a statement. The merged new company will have about ¥54 trillion (US$450 billion) of assets under management.
Mizuho Financial Group and Dai-ichi Life will hold 51% and 49% of the new company’s voting rights, respectively. The integration is expected to be competed in the first half of the 2016 fiscal year. Dai-ichi Life said this will become the first joint venture asset-management company in Japan, engaging business for investment trusts, investment advisory, trust banking and life insurance.
The integrating companies will include DIAM Co. Ltd., Mizuho Trust & Banking Co. Ltd., Mizuho Asset Management Co. Ltd. and Shinko Asset Management Co. Ltd. These companies reported aggregated ordinary revenue of ¥288 billion and net income of ¥67 billion in the 2014 fiscal year ended March 2015, according to Dai-ichi Life. The new company will promote more active investment of personal financial assets and will enhance services to pension funds’ investment needs.
The new company “will take action for further growth strategy, such as enhancing its global asset management capabilities and developing a sophisticated business infrastructure through strategic IT investment,” it said. Dai-ichi Life said it will utilize the new company’s capability to further enhance its proprietary investments and development of highly competitive saving-type insurance products.
Dai-ichi Life reported total assets of ¥49.8 trillion in the 2014 fiscal year, up from ¥37.7 trillion a year ago, according to Dai-ichi Life’s annual report. For asset investment, Dai-ichi Life said “we are looking at active investments and loans in sectors that are expected to see new capital demand, in an effort to harness our financial intermediary capabilities as an institutional investor.”
For future asset-management development, Dai-ichi Life said “we intend to generate group synergy to a greater extent through activities such as developing new insurance products.” The insurer will continue to diversify investment with broadening its scope of currencies and countries as part of overseas investment and investing in middle-risk middle-return sectors in both domestic and foreign markets.
Dai-ichi Life acquired U.S.-based asset-management company Janus Capital Group with the aim of enhancing its fund management business in the global market (Best’s News Service, Aug. 17, 2012). The Japanese insurer made Janus an affiliate of the group in 2013. In Vietnam, it launched Dai-ichi Life Vietnam Fund Management Co. Ltd. to engage business in equity portfolio and fund management and investment advice (Best’s News Service, March 25, 2014).
Dai-ichi Life Insurance Co. Ltd. currently has a Best’s Financial Strength Rating of A+ (Superior).