Nippon Life Eyes India Asset Management Growth With ESG Products

(Bloomberg) -- Armed with a controlling stake in India’s fifth-largest mutual fund company, Nippon Life Insurance Co. looks to outpace the local industry’s rapid growth by broadening its product offerings.

Japan’s biggest life insurer on Friday completed a deal to raise its stake in Reliance Nippon Life Asset Management Co. to 75%. Anil Ambani’s Reliance Group decided to sell off its interest to help meet debt obligations.

Nippon Life will retain the existing management but plans to rename and rebrand the business in the coming days. The Mumbai-based unit will launch investment products based on environmental, social and governance parameters as well as alternative investments for India’s ultra-rich.

“We can introduce some of the ideas in India,” Minoru Kimura, head of Asia Pacific for Nippon Life, said in an interview last week. “The Indian market is very domestic. However, as the industry and the economy mature, there would be need for diversification.”

The company aims to expand its Indian business using its own resources, though it may consider opportunities for acquisitions to bolster its investment capability. As an investor, Nippon Life has been buying high-yielding India bonds, Kimura said.

India may eventually follow the global trend toward exchange traded funds, but for now it still provides lots of opportunities for active fund managers to achieve better returns in the market, Kimura said.

“India is a rapidly growing market offering high growth and high yields,” he said. “The existing platform for fixed income and equities is well established, and we can bring in some global best practices.”

To contact the reporters on this story: Nupur Acharya in MUMBAI at nacharya7@bloomberg.net;Ronojoy Mazumdar in Mumbai at rmazumdar7@bloomberg.net

To contact the editors responsible for this story: Lianting Tu at ltu4@bloomberg.net, Kurt Schussler, Naoto Hosoda

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