Japanese insurance group MS&AD Insurance Holdings, through its subsidiary, Mitsui Sumitomo Insurance Co., Ltd. (MSI), is set to acquire an 18% equity stake in Barings, a global asset management subsidiary of MassMutual.
This investment from MS&AD is expected to close after the finalisation of customary closing conditions and approvals.
The deal aims to provide MassMutual with a strategic partner to enable Barings’ growth and long-term success, while also receiving approximately $1.44 billion in cash proceeds.
As part of the strategic partnership, MS&AD will provide growth capital to Barings. The firm will manage MS&AD’s assets within its general investment account, helping to strengthen and diversify the insurer’s investment portfolio, and providing greater access to Barings’ global public and private markets capabilities.
On closing of this agreement, a member of MS&AD’s leadership team will also join Barings’ Board of Managers, as MassMutual will have an 82% stake in Barings, remaining a majority owner with controlling governance rights.
Additionally, Barings will still manage the majority of MassMutual’s general investment account and remain core to its asset management strategy. The firm will continue to operate as an independent subsidiary of MassMutual with no changes to its day-to-day operations, investment committees, processes, or strategy.
Shinichiro Funabiki, President and Chief Executive Officer (CEO), MS&AD and MSI, commented, “We are pleased to have the opportunity to invest in Barings. Forming a new strategic partnership with Barings—an asset manager with a strong track record and deep expertise—and with MassMutual, a leading provider of high-quality life insurance solutions, carries significant meaning for our group. We are confident that supporting Barings’ sustainable, long-term growth in close collaboration with MassMutual will create lasting value for all three firms.”
Roger Crandall, Chairman, President & CEO, MassMutual, added, “At MassMutual, one of our distinct competitive advantages to deliver sustained value to our policyowners has long been our diverse portfolio of strategic businesses and investments, of which Barings plays a key role.
“This investment by MS&AD creates a strategic partnership with a leading global insurance company that is also deeply committed to Barings’ long-term success. The transaction accelerates Barings’ growth and builds on our long-standing, successful optimisation of the intersection of insurance and asset management, allowing us to realise even more value over time and ultimately benefiting our policyowners and customers.”
Mike Freno, Chairman and CEO, Barings, stated, “We are excited to partner with MS&AD and believe this is a unique opportunity to accelerate Barings’ growth. Building on MassMutual’s continued support, Barings will combine growth capital with our scale and expertise in public and private markets to drive our long-term strategy and deliver solutions for clients.”
Goldman Sachs & Co. LLC served as MassMutual’s financial advisor, while Simpson Thacher & Bartlett LLP were the legal counsel.
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