Fund and wealth manager M&G has struck a long-term partnership deal with Dai-ichi Life, one of Japan’s biggest investment and insurance companies.

The deal will see Dai-ichi Life aim to take a stake of about 15% in M&G plc and have the right to appoint a director on the board.

M&G said in a Stock Exchange announcement this morning it expected the deal to add about £4.5bn to its funds under management.

The two firms, Dai-ichi Life Holdings, Inc. (Dai-ichi Life HD) and M&G described the deal as a new long-term strategic partnership across asset management and life insurance.

M&G will become Dai-ichi Life HD's preferred asset management partner in Europe. The aim is to deliver, “substantial new business flows” for M&G and Dai-ichi Life HD.

M&G says it believes the deal will boost its asset management and international growth, particularly in  European private markets. It will also open new potential sources of business flows in Japan and across Asia.

M&G will support Dai-ichi Life HD's access to public and private markets capabilities in Europe.

Dai-ichi Life HD said it highly values the life insurance capabilities of M&G and, as part of the partnership, will work closely with M&G to enhance its own expertise in bulk purchase annuities.

M&G said it expected the partnership to generate at least £4.4bn in new business flows into funds managed by M&G over the next five years. About half of this is intended to be in M&G's high-alpha strategies across public and private markets.

The partnership is also expected to generate at least £1.5bn in new business flows for Dai-ichi Life over five years. Dai-ichi Life will also consider distributing M&G products in Japan and Asia and the two companies will work on new products.

There is also the possibility that Dai-ichi Life and M&G will also consider collaborating on life insurance in Europe and Japan. The two firms will also “pursue opportunities to co-invest in new asset management capabilities.”

Andrea Rossi, group CEO of M&G, said: "The strategic partnership with Dai-ichi Life Holdings and the associated c.15% investment is recognition of M&G's strengths and clear confidence in our leadership, strategy and long-term prospects. It brings together two highly complementary international businesses with shared growth ambitions who aim to deliver excellent client service and sustainable shareholder returns."

Tetsuya Kikuta, president and CEO of Dai-ichi Life HD said: "Dai-ichi Life Holdings is delighted to enter into a strategic alliance with M&G, a highly regarded global player in the insurance and asset management industries, to collaborate and develop capabilities together in multiple areas, especially in Europe."

"We see our partnership with M&G acting as a spearhead to develop our presence across Europe and the UK, accelerating our strategy to become a global top-tier insurance group. M&G possesses not only a reputable and long-established life insurance business, but comprehensive asset management solutions in both public and private markets."

• In an M&G trading update today the company said that despite a “volatile market environment” it has continued to execute the strategy it laid out at its recent Full Year 2024 Results. The performance year to date has been broadly in line with expectations, it said.