Dai-ichi Life Holdings and M&G have struck a distribution partnership that will see the Japanese firm take a roughly $1.1 billion stake in the U.K. money manager.

Japan¡¯s largest listed life insurer plans to buy about a 15% stake via on-market purchases, according to a statement on Friday. The stake would make Dai-ichi Life the largest shareholder of M&G, according to data compiled by Bloomberg.

Shares in M&G rose as much as 8.6% in early London trading, its biggest intraday gain since February 2023.

As part of the agreement, London-based M&G will become Dai-ichi Life¡¯s preferred asset management partner in Europe, according to the statement. The deal is expected to generate at least $6 billion in new business flows into funds managed by M&G and $2 billion likewise for Dai-ichi Life over the next five years.

Asset managers are seeking partnerships with insurers because they offer large balance sheets and the opportunity to match long-term liabilities to policyholders. Meiji Yasuda Life Insurance earlier this year announced plans to park ?150 billion ($1 billion) with British hedge fund firm Man Group to invest in private assets.

Tokyo-listed Dai-ichi Life has been aggressively expanding beyond traditional life insurance in Japan and focusing on asset management as one of its growth areas.

The company said on May 12 it plans to buy an additional stake in U.K.-based Capula Investment Management. In an interview last week, Chief Executive Officer Tetsuya Kikuta said the company could start looking at deals worth several billion dollars in the asset management industry once it completes current efforts to boost capital efficiency.

The partnership between M&G and Dai-ichi Life may lead to potential co-investments in European asset managers in areas such as real estate, infrastructure and private credit, M&G Chief Executive Officer Andrea Rossi said in an interview Friday after the announcement. The company said its performance since the beginning of the year has been broadly in line with expectations.

M&G, which was spun out of Prudential in 2019, has been trying to grow via acquisitions in areas including private markets, making a bigger push into Europe to attract more institutional investors.