Dai-ichi Life Invests in Capula, Dissolves Capital Relationship with Ocean Life

Dai-ichi Life Holdings has decided to make an additional investment of approximately 10.3% in Capula, a leading UK-based alternative management firm with world-class expertise in fixed-income arbitrage, crisis alpha and global macro strategies, while agreeing to transfer all shares held by Dai-ichi Life International in Ocean Life Insurance, a Thai life insurance company, to the founding family of Ocean Life, who are the controlling shareholder.

Investment in Capula

Dai-ichi Life Holdings has decided to make an additional investment of approximately 10.3% in Capula, a leading UK-based alternative management firm with world-class expertise in fixed-income arbitrage, crisis alpha and global macro strategies.

Dai-ichi Life Insurance, a wholly-owned subsidiary of Dai-ichi Life Holdings, already holds approximately a 4.7% stake in Capula. As a result of this Investment, the combined equity interest of Dai-ichi Life Holdings and Dai-ichi Life Insurance will be 15%. Following the appointment of a Board of Partners member from Dai-ichi Life Holdings to Capula, Capula will become an equity-method affiliate of Dai-ichi Life Holdings.

Overview of Capula

Capula is an alternative asset management company established in 2005 by co-founders Yan Huo and Masao Asai. As of the end of 2024, its assets under management (AUM) totaled USD 31.8 billion (approximately JPY 4.8 trillion). Capula is headquartered in London, UK, with additional offices in Japan, the United States, Hong Kong, and Singapore, employing a total of 408 executives and staff, including 142 investment professionals.

Capula has strengths in fixed-income arbitrage strategies. Its flagship fund, the Global Relative Value Master Fund (“GRV”), is the world's largest fixed-income arbitrage fund and has delivered some of the best investment results in the industry, with an average annual return of 8.29% and a Sharpe ratio of 2.47 since its inception in 2005.

Capula and Dai-ichi Life Holdings have built a strong mutual understanding through Dai-ichi Life Insurance's investments in Capula funds since 2014 and in Capula itself in 2018. The relationship has also been strengthened through non-investment collaborations, including trainee programs.

Strategic Rationale for the Investment

Dai-ichi Life Holdings has been exploring inorganic growth opportunities in the capital-light asset management business, with the aim of achieving a group corporate value of JPY 10 trillion and a profit target of JPY 600 billion by 2030.

Dai-ichi Life Holdings anticipates that its 15% stake in Capula will generate equity income of approximately JPY 5 billion in FY2025. The Investment is expected to contribute to the further growth of Dai-ichi Life Holdings' asset management business through the diversification of business risks and the synergy created by jointly developing products.

• Enhancement of Alternative Investments and Diversification of Investment Strategies: In recent years, the asset management industry has seen a shift of funds from traditional to alternative assets, as well as a shift from active to passive products. Amid this change, Dai-ichi Life Holdings invested in Canyon Partners, which has strengths in credit investments, and believes it is essential to pursue further diversification of investment styles (i.e., business risks) within the alternative investment domain, in addition to leveraging the growth of the alternative market and utilizing alternative investment capabilities to develop the group savings products. Capula's flagship fund, GRV, pursues absolute returns and is characterized by a low correlation with the market risks of traditional assets such as stocks and bonds, as well as the credit risks associated with countries and companies arising from economic trends. The Investment is expected to contribute to both stable growth and business risk diversification in the Company’s asset management business area.
• Synergies through Jointly Developing Products: Capula possesses one of the leading expertise in global fixed-income investments and hedging strategies using derivatives, which is utilized in the GRV fund. These strengths are closely aligned with quantitative investment strategies (quants), in which the Dai-ichi Life Holdings' affiliates excel. Dai-ichi Life Holdings anticipates synergies in the development of new products.

Dissolution of Capital Relationship with Ocean Life

Dai-ichi Life Holdings has agreed to transfer all shares in Ocean Life Insurance, a Thai life insurance company, held by Dai-ichi Life International, an intermediate holding company of the Dai-ichi Life Group, (investment ratio: 24.0%) to the founding family of Ocean Life, who are the controlling shareholder of Ocean Life.

Since the start of Dai-ichi Life Holdings' strategic business collaboration with Ocean Life in 2008, including investment in Ocean life, Dai-ichi Life Holdings has been working to improve Ocean Life's corporate value, contribute to the development of the Thai life insurance market, and provide group insurance products to Japanese companies operating in Thailand over 15 years.

After reconsidering Dai-ichi Life Holdings' future overseas insurance business strategy based on the mid-term management plan and holding discussions with shareholders, Dai-ichi Life Holdings has come to the conclusion that the best course of action for both is to transfer all shares in Ocean Life held by Dai-ichi Life International to the founding family of Ocean Life and reached agreement with the founding family. Even after the dissolution of the capital relationship with Ocean Life, Dai-ichi Life Holdings will maintain a good relationship with Ocean Life.

As a result of the sales of shares of Ocean Life, Dai-ichi Life Holdings expects to record an extraordinary income in the fiscal year ending March 2026.

Dai-ichi Life Holdings will continue to pursue attractive shareholder returns through strategic capital allocation, while striving to further grow its overseas insurance business through both organic strategies leveraging its existing overseas operations and inorganic strategies such as quality M&A.