Finance Markets: Jack Ma’s Firms Buy an Insurer

2017.08.21 华尔街

By Julie Steinberg and Chuin-Wei Yap

Massachusetts Mutual Life Insurance Co. agreed to sell its Hong Kong-based operations for about $1.7 billion to a group of Asian investors that includes two companies affiliated with Chinese billionaire Jack Ma.

The cash-and-stock deal will see MassMutual collect $1 billion in cash and take a roughly 25% stake in Yunfeng Financial Group Ltd., a Hong Kong-listed financial-services company that trades securities, sells investment products and is expanding into the growing financial technology, or fintech, sector.

Yunfeng Financial, whose main backer is a private-equity firm controlled by Mr. Ma, will own about 60% of MassMutual’s Hong Kong business, known as MassMutual Asia Ltd.

Seven other investors, including Ant Financial Services Group and a company backed by Singapore sovereign-wealth fund GIC Pte. Ltd., will own minority stakes in the business.

Ant Financial is an affiliate of e-commerce giant Alibaba Group Holding Ltd., where Mr. Ma is chairman and co-founder.

Yunfeng Financial used to be a brokerage known as Reorient Group Ltd. before Mr. Ma’s private-equity firm, Yunfeng Capital — named in part after Mr. Ma’s Chinese first name Yun — bought a controlling stake in it two years ago. The MassMutual deal represents Yunfeng’s first major acquisition, and signals a rising ambition across Mr. Ma’s business empire to expand its global footprint.

MassMutual, based in Springfield, Mass., is one of American’s oldest and largest mutual life-insurance companies. It has operated in Hong Kong and Macau since 2000, when it first acquired a life-insurance business there, according to a company spokesman. The unit it is divesting to Yunfeng sells life-insurance products and manages pension and retirement savings for Hong Kong residents. MassMutual’s top U.S. executives said in a statement the transaction will enable the company to “continue to participate in the growing and attractive Asian markets” through the stake it will own in Yunfeng.

Yunfeng Financial this year launched a “robo-advisory” platform as part of its asset-management services. Robo-advisory services use algorithms to direct investments and provide financial advice to customers with little human intervention. Following the deal, Yunfeng will be able to sell MassMutual’s life-insurance products in this manner.

Yunfeng’s acquisition paves the way for a deeper foothold in global financial services for another key part of Mr. Ma’s business. Ant will own 5% of MassMutual Asia. The transaction will allow MassMutual, Yunfeng and Ant Financial to work together to explore future business opportunities, the companies said. Ant operates a suite of financial services including mobile payments, insurance and credit scoring.