Mitsui Sumitomo Insurance to take 18% stake in MassMutual’s Barings for $1.4bn
Mitsui Sumitomo Insurance (MSI), part of the MS&AD Insurance Group, has agreed to acquire an 18% equity share in Barings, the asset management subsidiary of Massachusetts Mutual Life Insurance Company (MassMutual).
The transaction will see MassMutual receive approximately $1.44bn (Y223.43bn) in cash.
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Barings manages more than $470bn in assets worldwide.
After the sale, MassMutual will continue to hold a majority position in Barings, maintaining an 82% stake and full governance control.
Barings will keep managing most of MassMutual’s general investment account and remains integral to its asset management approach.
According to both companies, Barings will continue its operations as an independent subsidiary with no planned alterations to its daily business activities or investment processes.
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By GlobalDataBarings CEO and chairman Mike Freno said: “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.”
MS&AD will offer capital to support Barings’ long-term expansion plans as part of the arrangement.
Additionally, Barings is expected to increase its management of assets on behalf of MS&AD’s general investment account.
This move is designed to further diversify MS&AD’s investment portfolio and provide access to Barings’ expertise in global public and private markets.
Upon finalisation, a member of MS&AD’s leadership will join the board of managers at Barings.
The acquisition is subject to standard closing conditions and regulatory approvals.
MS&AD Group has indicated that this investment aligns with its strategy to expand its asset management capabilities and diversify its business portfolio.
The agreement also opens opportunities for collaboration with Martello Re, a reinsurance company in which MassMutual is a key investor and whose assets are largely managed by Barings.
This arrangement is expected to offer MS&AD Group greater flexibility in managing insurance risks and capital efficiency.
MS&AD and MSI CEO and president Shinichiro Funabiki said: “We are confident that supporting Barings’ sustainable, long-term growth in close collaboration with MassMutual will create lasting value for all three firms.”
In September, Bloomberg reported that MassMutual was examining the possibility of entering into a reinsurance agreement to decrease its life insurance reserves.
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