Barings wasn’t just looking for capital — it was looking for a partner that fit its model.
Mike Freno, chairman and CEO of Barings, says asset managers now need capital to keep growing — to seed funds, make acquisitions, and compete in a business where fees keep getting squeezed.
That helps explain why MassMutual and Barings, which has $481 billion in assets, brought Japanese insurer Mitsui Sumitomo Insurance in as an 18 percent owner of the asset manager. The deal, which was announced in November and closed this week, gives Barings an insurance company partner that brings both assets to manage and capital it can deploy into growth. Mitsui is a subsidiary of MS&AD Insurance Group.
“We wanted someone who had capital to help us on the growth strategy, both from an organic and inorganic standpoint: seeding businesses, seeding funds, hiring people to build out teams, as well as then making more acquisitions,” said Freno.
Freno said Barings wasn’t looking to sell part of the business. Instead, the firm wanted a partner that fit with its strategy as consolidation reshapes asset management.
“Because if we want to talk about the industry—the industry is going to probably change more in the next five years than it has in the last 20.”
Now the firm has more capital to fund an expansion.
“As we look to make acquisitions… we’ve made three acquisitions in the last, I think it’s three years—two on the real estate side, one on the ABF side. I envision us continuing to do that.”
Still, the goal isn’t simply to get bigger. “Scale for the sake of scale is not really great,” Freno said. “But if you’re building scale in what you’re good at, then I think that’s going to be really, really important.”
