Dai-ichi Life Holdings, the largest publicly traded life insurance group in Japan, has agreed to acquire a 19.9% strategic minority stake in Dallas-based Canyon Partners, a $24 billion global alternative investment manager.
Canyon Partners said that all of the net proceeds from the transaction will be retained on its balance sheet and reinvested in the business, providing funding to seed new products and optimally scale existing products.
In connection with the deal, Dai-ichi also will be committing at least $1.3 billion of LP capital to several of Canyon’s commingled funds, the company said. Canyon’s current management team will continue to lead the company, with co-founders and co-CEOs Josh Friedman and Mitch Julis committing to stay on at Canyon for at least five years, Canyon said.
“After over three decades in a rapidly evolving alternative investment landscape, Canyon was one of the few remaining independent credit firms. 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,” Friedman and Julis said in a joint statement.
“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,” they added. “It is also a large institutional asset owner whose capital deployment goals are synergistic with Canyon’s product development initiatives. This transaction will enable us to double down on our alignment with current and future LPs, provide our LPs with a broader array of solutions and deal flow by tapping into Dai-ichi’s capital, increase our competitiveness relative to peers that have long enjoyed the benefits of external GP capital, and continue attracting top tier talent for decades to come. We’re excited to lead the firm through its next stage of evolution over the next five years and set up Canyon’s next generation leaders with an incredibly well-capitalized platform that is on its front foot.”
Under the agreement, Dai-ichi has the right to acquire up to 51% of the equity interest in Canyon in 2027 and up to 100% in 2029.
Should Dai-ichi exercise that right, the Canyon team would retain the vast majority of the incentive fees generated by its products, ensuring significant and ongoing alignment with LPs, Canyon said.
Strengthens Dai-ichi’s overall business portfolio
“By leveraging Canyon’s leading capabilities in alternative asset management, and specifically its private debt experience, Dai-ichi will strengthen its overall business portfolio, provide higher absolute and risk-adjusted returns to stakeholders, and advance its capital efficiency objectives,” Takashi Iida, managing executive officer, group head, Retirement, Savings and Asset Management Business of Dai-ichi Life Holdings, said in a statement. “Under the leadership of Mr. Friedman and Mr. Julis, Canyon has built excellent long-term investment track records across several asset categories, and we appreciate the firm’s leaders’ continued commitment to advancing the business.”
Goldman Sachs & Co. LLC and Ardea Partners LP acted as financial advisors to Canyon, while Paul, Weiss, Rifkind, Wharton & Garrison acted as Canyon’s legal counsel.
BofA Securities acted as financial advisor to Dai-ichi Life Holdings, while Skadden, Arps, Slate, Meagher & Flom LLP acted as Dai-ichi’s legal counsel.
Canyon was founded in 1990 and it employs a deep value, credit intensive approach across public and private corporate credit, structured credit, and direct real estate lending and investing.
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