Resolution Life will retain Nikko as an underlying fund manager following its $410 million purchase of the Asteron Life NZ business from Suncorp last week.
After the deal closes “Nikko will… become one of Resolution Life’s external managers and be subject to Resolution Life’s usual multi manager monitoring and review framework”, a spokesperson for the global life insurance roll-up said.
Nikko (previously owned by Suncorp) has long served as manager of the Asteron assets, which hit about $520 million in funds under management (FUM) as at the end of March last year.
However, Resolution mostly uses Mercer-Macquarie (ex AMP Capital) funds in NZ in an arrangement continued as part of its A$3 billion purchase of AMP Life in 2020.
“Once the [Asteron] acquisition completes, total FUM will be approximately $NZ5.5bn,” the spokesperson said.
As at the end of 2022, Resolution reported more than $1.3 billion in funds managed by “significant associates” including the-then Macquarie Asset Management NZ (later taken over by Mercer) – although the Mercer-Macquarie mandate is likely in excess of $3 billion.
Over 2022, Resolution NZ booked an investment loss of almost $730 million, the annual report shows, during a year when both bonds and equities slumped.
Total financial assets fell to $4.4 billion at the end of 2022 compared to almost $5.5 billion 12 months prior.
While Resolution has retained the mandate with the former AMP Capital (now Mercer-Macquarie) NZ, it is understood some of the underlying managers have been swapped out.
The spokesperson said: “Resolution Life adopts an active investment management approach – assessing each strategy and its asset class on its own merits.”
Resolution entered the Australasian market via the AMP life buy (taking full ownership in 2021) while scooping up the AIA Australia superannuation and investment life business last year.
The Bermuda-headquartered firm struck a deal with private equity manager, Blackstone, in 2022 to raise a further US$3 billion of capital (finalised last October) to fund further buyouts. Blackstone, which briefly owned NZ insurer Partners Life, invested US$500 million in Resolution directly as well.
As part of the arrangement, Resolution appointed Blackstone as underlying fund manager for sectors including private credit, real estate and asset-based-finance in a mandate worth about US$25 billion at the time.
In January 2023 majority shareholder, Nippon Life, also injected another US$1 billion of capital into Resolution.
“The enhanced capital base will allow Resolution Life to rapidly scale its global growth path in a highly active acquisition market – continuing its mission of being a global custodian to life insurance and annuity policyholders,” according to a joint statement.
Asteron would continue to operate in NZ as a stand-alone brand, the group said in a release, with the purchase pending regulatory approvals expected by the end this year or early 2025.
Tim Tez, Resolution Australasia chief, said: “This acquisition further demonstrates our commitment to the Australasian market and our success in growing our business in the region.”