UPDATE 1-Nippon Life to take stake in Russell - sources

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By Taro Fuse

TOKYO, July 22 (Reuters) - Japan's Nippon Life Insurance plans to invest about 30 billion yen ($282 million) in Russell Investments and form a business alliance with the U.S. investment and index group, sources familiar with the matter said.

Nippon Life, Japan's top life insurer with about 46 trillion yen of assets, hopes the tie-up will help it bolster its ability to manage a broader range of assets including emerging market shares, the sources said, speaking on condition of anonymity.

Russell Investments is headquartered in Tacoma, Washington, and is a subsidiary of Northwestern Mutual Life Insurance Co. It had $211 billion of assets under management as of June 30, according to its website.

A spokesman for Nippon Life declined to comment while a spokeswoman for Russell Investments in Tokyo said she was making checks.

Nippon Life has been negotiating with several asset management companies in the United States and Europe, the sources said, as it seeks alliances to help it diversify a portfolio that is heavily weighted towards low-yielding yen assets.

Russell has global reach and a track record in managing a wide range of financial products. Nippon Life aims to use the tie-up as a springboard to strengthen its ability to invest in higher yielding assets such as emerging market stocks and bonds, and alternative products.

Nippon Life had two-thirds of its portfolio in yen-based assets such as Japanese government bonds as of the end of March, according to figures provided by the insurer.

Other insurers are also looking to diversify their portfolios.

Japan's No.2 Dai-ichi Life Insurance said in April it would consider raising its holdings of investments such as funds of funds, while Taiyo Life Insurance, Japan's No.6 life insurer, said in the same month it planned to shift 40-50 billion yen of its foreign bonds mainly to hedge funds.

Russell, which has offices in Tokyo, Paris, London, Seoul, Singapore, Amsterdam and other places, has created various stock indices, including the Russell Global Index, which keeps track of 98 percent of global stock markets. (Reporting by Taro Fuse; Writing by Nathan Layne and Junko Fujita; Editing by Edwina Gibbs)