Blackstone keen to boost Nippon Life ties after Resolution deal

BLACKSTONE signalled that it’s eager to strengthen its relationship with Nippon Life Insurance following the Japanese firm’s US$8.2 billion purchase of Resolution Life Group Holdings.

Nippon announced on Wednesday (Dec 11) that it plans to buy Blackstone-backed Resolution in a bid to expand globally. The private equity firm holds a small stake in Resolution and manages money for the Bermuda-based company.

“The opportunities grow with Nippon,” Blackstone president Jon Gray said later in the day at a financial services conference hosted by Goldman Sachs, after he was asked whether the deal creates an opening to do more business with the Osaka-based insurer. “We would love to do more with really well-run, thoughtful companies with a lot of ambitions.”

Blackstone, the world’s biggest manager of alternative assets, will continue to be Resolution’s investment manager across private credit and other areas after Nippon completes the acquisition.  

The private equity firm’s partnership with Resolution was part of an effort to tap insurers’ vast cash reserves and channel their money to lend to more blue-chip companies.  

Blackstone’s model – using its corporate balance sheet to take minority stakes in several insurers whose money it manages – contrasts with those of Apollo Global Management and other rivals that have swooped in to buy entire insurers outright.

Gray, 54, said that the model helps keep Blackstone’s balance sheet slim. It also prevents unwanted headaches that arise from being in the insurance business and competing with clients.

“The idea of using small amounts of strategic capital to show alignment” is the model the firm is standing behind, he said.  

With Nippon’s deal to acquire the 77 per cent of Resolution that it does not own – valuing the target at US$10.6 billion – Blackstone now also stands to deepen its footprint in Japan. Gray has said his firm expects to make about US$20 billion in real estate and corporate investments in that country during the next three years. BLOOMBERG