Dai-ichi Life Holdings plans to increase its stake in UK-based hedge fund Capula Investment Management to 15%, seeking to leverage the fund’s bond investment expertise amid volatile market conditions.
The Japanese life insurance group will acquire an additional 10% stake in Capula as early as this month, building on the nearly 5% stake its subsidiary Dai-ichi Life Insurance already holds. The subsidiary initially acquired Capula shares from trading house Mitsubishi Corp. in 2018.
Financial terms of the transaction were not disclosed, though Dai-ichi Life expects to generate approximately ¥5 billion (US$34 million) in annual equity income from the investment starting in 2026, according to a report from Bloomberg.
According to Nikkei Asia, the increased investment will make Capula an equity-method affiliate of Dai-ichi Life, which plans to send a director to the hedge fund’s board.
Founded in 2005 by former UFJ Bank employee Masao Asai, Capula has grown to manage approximately US$35 billion in assets, establishing itself as one of the world’s largest bond-focused hedge funds. The firm is particularly known as a major player in Japanese government bond trading.
Capula specializes in relative-value investing—a strategy that profits from price differences by maintaining both long and short positions in bonds—and crisis alpha strategies designed to generate returns during market downturns. The fund manages assets for corporate pensions and government-affiliated funds globally.
The move comes as global financial markets face instability partly attributed to US president Donald Trump’s tariff policies, creating challenges for monetary policy prediction at both the Federal Reserve and Bank of Japan.
For Dai-ichi Life Holdings, this investment represents part of a strategic pivot away from traditional life insurance in Japan’s mature market. The company aims to expand its more profitable investment business and increase its adjusted return on equity from approximately 8% in fiscal 2023 to 10% by fiscal 2026.
This acquisition follows Dai-ichi’s recent investments in asset management firms, including Japan’s Topaz Capital in 2023 and US-based Canyon Partners in 2024, both specializing in private debt markets.
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