SPRINGFIELD — MassMutual and its global asset management subsidiary Barings announced that MassMutual has entered into an agreement in which MS&AD Insurance Group Holdings Inc. (MS&AD) will acquire an 18% equity stake in Barings through its subsidiary Mitsui Sumitomo Insurance Co. Ltd. (MSI), a leading Japanese insurance company.
As a result of this transaction, MassMutual will gain a strategic partner that shares its deep commitment to Barings’ growth and long-term success while also receiving approximately $1.44 billion in cash proceeds.
MassMutual will remain Barings’ majority owner with an 82% stake and controlling governance rights, and Barings will also continue to manage the majority of MassMutual’s general investment account and remain core to the company’s asset management strategy. Barings will continue to operate as an independent subsidiary of MassMutual with no changes to its day-to-day operations, investment committees, processes, or strategy.
As part of the strategic partnership, MS&AD will provide growth capital to support Barings in achieving its long-term growth strategy. In addition, Barings will expand its existing relationship with MS&AD through the management of assets within MS&AD’s general investment account, helping to strengthen and diversify MS&AD’s investment portfolio and giving it greater access to Barings’ global public and private markets capabilities. A member of MS&AD’s leadership team will also join Barings’ board of managers.
“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,” said Roger Crandall, chairman, president, and CEO of MassMutual. “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 optimization of the intersection of insurance and asset management, allowing us to realize even more value over time and ultimately benefiting our policyowners and customers.”
Mike Freno, chairman and CEO of Barings, added that “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.”
Shinichiro Funabiki, president and CEO of MS&AD and MSI, added that “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.”
The transaction is expected to close after customary closing conditions and approvals have been finalized. Goldman Sachs & Co. LLC served as MassMutual’s financial advisor on the transaction, and its legal counsel was Simpson Thacher & Bartlett LLP.
