Key Takeaways
- • Dai-ichi Life Holdings plans to raise its stake in UK-based hedge fund Capula Investment Management to 15% by acquiring an additional 10%, as early as May 2025, according to Bloomberg.
- • Financial terms were not disclosed, but Dai-ichi Life expects roughly ¥5 billion (US$34 million) in annual equity income from the investment starting in 2026.
- • Capula, founded in 2005 by Masao Asai, manages approximately US$35 billion and is one of the largest bond-focused hedge funds, with a major presence in Japanese government bond trading.
- • The increased stake would make Capula an equity-method affiliate of Dai-ichi Life, which plans to place a director on the hedge fund's board, per Nikkei Asia.
- • The deal is part of Dai-ichi's pivot from mature-market traditional life insurance toward higher-return investment businesses, targeting adjusted ROE of 10% by fiscal 2026 from about 8% in fiscal 2023.
Summary
Dai-ichi Life Holdings plans to increase its stake in UK-based hedge fund Capula Investment Management to 15%, seeking to leverage the fund's bond investment expertise amid volatile market conditions. The Japanese life insurance group will acquire an additional 10% stake as early as this month, building on the nearly 5% stake held by its subsidiary Dai-ichi Life Insurance. That subsidiary originally acquired Capula shares from trading house Mitsubishi Corp. in 2018.
Financial terms of the transaction were not disclosed. According to a Bloomberg report, Dai-ichi Life expects to generate approximately ¥5 billion (US$34 million) in annual equity income from the investment starting in 2026. Nikkei Asia reported that the larger holding will make Capula an equity-method affiliate of Dai-ichi Life, which plans to send a director to the hedge fund's board.
Founded in 2005 by former UFJ Bank employee Masao Asai, Capula has grown to manage approximately US$35 billion, establishing itself as one of the world's largest bond-focused hedge funds and a major participant in Japanese government bond trading. The firm specializes in relative-value strategies, which profit from price differences through paired long and short bond positions, and in crisis alpha strategies intended to generate returns during market downturns. Its clients include corporate pensions and government-affiliated funds globally.
The move comes as global markets face instability partly attributed to US President Donald Trump's tariff policies, which complicate monetary policy forecasting at both the Federal Reserve and the Bank of Japan. For Dai-ichi Life, the investment is part of a strategic shift away from traditional life insurance in Japan's mature market toward more profitable investment businesses. The company aims to raise its adjusted return on equity from approximately 8% in fiscal 2023 to 10% by fiscal 2026.
The acquisition follows Dai-ichi's recent investments in asset management firms, including Japan's Topaz Capital in 2023 and US-based Canyon Partners in 2024, both specializing in private debt markets.
Financial terms of the transaction were not disclosed. According to a Bloomberg report, Dai-ichi Life expects to generate approximately ¥5 billion (US$34 million) in annual equity income from the investment starting in 2026. Nikkei Asia reported that the larger holding will make Capula an equity-method affiliate of Dai-ichi Life, which plans to send a director to the hedge fund's board.
Founded in 2005 by former UFJ Bank employee Masao Asai, Capula has grown to manage approximately US$35 billion, establishing itself as one of the world's largest bond-focused hedge funds and a major participant in Japanese government bond trading. The firm specializes in relative-value strategies, which profit from price differences through paired long and short bond positions, and in crisis alpha strategies intended to generate returns during market downturns. Its clients include corporate pensions and government-affiliated funds globally.
The move comes as global markets face instability partly attributed to US President Donald Trump's tariff policies, which complicate monetary policy forecasting at both the Federal Reserve and the Bank of Japan. For Dai-ichi Life, the investment is part of a strategic shift away from traditional life insurance in Japan's mature market toward more profitable investment businesses. The company aims to raise its adjusted return on equity from approximately 8% in fiscal 2023 to 10% by fiscal 2026.
The acquisition follows Dai-ichi's recent investments in asset management firms, including Japan's Topaz Capital in 2023 and US-based Canyon Partners in 2024, both specializing in private debt markets.
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