JAPAN’S LIFE INSURERS TARGET PRIVATE EQUITY MARKET

A number of Japan’s life insurers are planning to establish private equity and hedge fund units to take advantage of the current growth in the alternative investment market. The latest move has been by Daido Life, which has set up a specialist department to look after unlisted securities investments. It will assign a staff of 10 to man its private equity department, which will be charged with investing a fund of ¥120bn in unlisted stocks from the North American, Western European and Japanese markets. Daido is aiming to grow the fund to ¥200bn within four years. Hedge fund and private equity assets account for nearly 5% of the insurer’s total assets (¥310bn) with unolisted securities generating a return between 15 and 20% currently. Other Japan-based life insurers have established similar units for their growing interest in alternative investments. Dia-ichi Mutual Life has a 15-strong team managing a ¥5tn fund in foreign bonds and investments, while Nippon Life has dedicated 20 employees to manage its private equity and hedge fund unit and is aiming to accrue over ¥1tn in alternative investment assets over the next five years.