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MassMutual Retreats from Asia, Sells to Yunfeng Financial Group

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Massachusetts Mutual Life Insurance Company (MassMutual) in August 2017 sold its Hong Kong-based subsidiary, MassMutual Asia, to Yunfeng Financial Group and other Asia-based investors for approximately $1.7 billion, including a 24.8% stake in Yunfeng Financial Group.

MassMutual Asia owns a P/C insurer and MassMutual Trustees, which focuses on the Mandatory Provident Fund business, a compulsory pension plan for the retirement of residents in Hong Kong.

According to the joint release, MassMutual and Yunfeng will cooperate going forward, Yunfeng bringing its fintech expertise to the partnership. Earlier in 2017, Yunfeng announced it had created a robo-advisor application called Youyu to manage the wealth of lower-income Chinese and Hong Kong investors (minimum investment is $800) who are keen on buying securities overseas, a segment traditionally neglected by banks and financial institutions due to cost considerations. Yunfeng is backed by Alibaba’s founder Jack Ma, who owns 29.9% of Yunfeng Financial Holdings, which in turn owns¬† a 37% stake in Yunfeng Financial Group.

MassMutual’s motivations may have included a need for cash, and/or the realization that further growth in China is difficult to achieve without local partners. The deal leaves MassMutual with $1 billion in cash and a large but minority stake in, but no control over, a listed Chinese firm.

MassMutual’s other businesses in Japan and in China are not affected.

 

 

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