Japan's Dai-ichi Life Holdings Inc. agreed to acquire a stake in Union Bank of India's mutual fund unit by investing in compulsorily convertible preference shares.

Dai-ichi Life's investment in Union Asset Management Co. Pvt. Ltd. is expected to translate into an approximately 39.62% stake on a fully diluted basis following the conversion of shares, according to an Oct. 18 release. The preference shares are convertible into equity after a certain fixed period.

The investment is subject to the approval of regulatory authorities.