Massachusetts Mutual Life Insurance Co. is weighing a sale of decades-old asset manager OppenheimerFunds Inc., which could fetch at least $5 billion, according to people familiar with the matter.

The Springfield, Massachusetts-based insurer is working with advisers to evaluate a sale, a process that is at an early, informal stage, said the people, who asked not be identified because the matter isn’t public. No decision has been made and MassMutual could opt to hold onto the firm, they said.

A representative for MassMutual declined to comment.

The potential sale comes as asset managers grapple with narrowing margins as fees fall and regulatory costs mount. Firms such as Oppenheimer that focus on actively managed funds have also been steadily losing business to so-called passive vehicles such as index funds, which are cheaper.

Those pressures have analysts expecting more industry consolidation as large and midsize money managers look for scale and diversity to boost sales.

Oppenheimer’s business may be more insulated from the heat than most. It’s been around since 1959 and was acquired by MassMutual in 1990. The unit’s investments cover a broad range of asset classes, everything from international and domestic stocks and bonds to municipal bonds and alternatives. Combined, the division managed more than $249 billion as of the end of July, according to its website, and has been expanding into exchange-traded funds in recent years to diversify and boost fees.

On the equity side, some of its biggest funds are international, including the $39 billion Oppenheimer Developing Markets Fund, the $11.6 billion Oppenheimer Global Fund and the $11.1 billion Oppenheimer International Small-Mid Company Fund. Active international stock funds attracted $51 billion in the year ended June 30, even as funds that invest in U.S. stocks experienced redemptions of almost $200 billion, according to Morningstar Inc. International funds also typically command higher fees than domestic ones. Municipal bond funds, another Oppenheimer specialty, attracted more than $20 billion in the same 12 month period.

MassMutual meanwhile has been shedding businesses and relocating employees around the U.S. as Chief Executive Roger Crandall seeks to reshape the firm. The life insurer is among the largest and most prominent in the U.S. that is owned by its policyholders rather than stockholders.

Bloomberg News