Japanese insurance company Dai-ichi Life Holdings has acquired of a minority stake in Canyon Partners, a leading alternative investment manager based in the United States.
The investment entails Dai-ichi Life Holdings injecting $255 mn into Canyon Partners, acquiring a 19.9% ownership share.
The transaction marks a significant development, with all net proceeds from Dai-ichi’s investment being channeled back into Canyon’s operations. These funds will be retained on Canyon’s balance sheet and reinvested to support the development of new products and enhance the scalability of existing offerings (see about Investment Strategies of US Life Insurers).
Dai-ichi has committed to providing at least $1.3 billion of Limited Partner (LP) capital across several of Canyon’s commingled funds, further bolstering the partnership.
Dai-ichi is an innovative firm with a history of savvy product development and successful investments in and partnerships with Japanese and non-Japanese companies alike.
Notably, Canyon’s current management team, led by Co-Founders and Co-CEOs Josh Friedman and Mitch Julis, will remain at the helm of the company for at least five years, ensuring continuity and stability in leadership.
Established in 1990 and headquartered in Dallas, Canyon Partners boasts assets under management totaling $24.4 billion, solidifying its position as a major player in the alternative investment landscape.
After over three decades in a rapidly evolving alternative investment landscape, Canyon was one of the few remaining independent credit firms
Mitchell Julis, Canyon’s Co-Founder and Co-CEO
Under the terms of the agreement, Dai-ichi holds the option to increase its equity interest in Canyon to 51% by 2027 and potentially acquire full ownership by 2029. In such a scenario, Canyon’s management team will retain a significant portion of the incentive fees generated by its products, aligning their interests closely with those of the LPs.
This transaction will enable to double down on alignment with current and future LPs, provide LPs with a broader array of solutions and deal flow by tapping into Dai-ichi’s capital, increase competitiveness relative to peers that have long enjoyed the benefits of external GP capital, and continue attracting top tier talent for decades to come.
It was important to us to maintain that independence until we could identify a strategic partner that could bring skills, capital, and competitive edges of its own to further enhance Canyon’s position for the next several decades
Joshua Friedman, Canyon’s Co-Founder and Co-CEO
Dai-ichi Life Holdings will strengthen its overall business portfolio, provide higher absolute and risk-adjusted returns to stakeholders, and advance its capital efficiency objectives.
by Yana Keller
