NEW YORK ( TheStreet) -- Hartford Financial Services Group ( HIG) is trying to unload its profitable mutual-fund business in order to calm investors worried about losses in its Japanese unit, according to industry analysts. "Their business in Japan has caused a lot of uncertainty for investors," says FBR Capital Markets analyst Randy Binner. "The company is adequately capitalized, but a billion in extra capital would be a good deal for them because of concerns due to the level of yen, interest rates and uncertainty over regulations." A Bloomberg report says the insurer is shopping its mutual-fund unit for $1.5 billion. Goldman Sachs ( GS) and UBS ( UBS) are running the sale, according to the report. The unit has $104 billion in assets and generated $2.3 billion of net inflows over the past year, according to published reports. Hartford did not comment on the sale speculation. Hartford discontinued sales of annuities in Japan in 2009 after poor results, but it continues to manage liabilities from the business through expensive derivative hedges. "It makes a lot of sense. That take out price sounds about right," Binner argues, adding that Hartford has been looking to raise more capital as investors have grown uneasy about the costs tied to its run off of its variable annuity business in Japan. Binner says that the company had allocated $1 billion of capital against that business, but in a first-quarter earnings conference call management explained that it was working on additional an "hedging solution" for losses in Japan. However, the news of the mutual fund unit sale surprised some analysts such as Credit Suisse analyst Thomas Gallagher, who says the move would be at odds with the company's strategy to create longer term value. "This is an attractive business, given the lack of capital intensity, strong free cash flow, and favorable contribution to the company's return on equity," Gallagher says in a note issued Thursday. "Since we view this as one of the best parts of the HIG non-P&C business, we wonder whether this suggests that HIG's intent to return capital to shareholders has met some resistance from the rating agencies." Not all analysts believe that selling the asset would be a mistake. Deutsche Bank ( DB) analyst Darin Arita said in a note that the market remains pessimistic on the Hartford and a sale would increase the bank's market cap by 70 percent to $3.6 billion. Morningstar asset management analyst Gregory Warren said he did not know what buyers would be interested in the business. "I was kind of under the belief that most of the selling of asset management businesses were done," Warren says. Hartford's stock was trading down nine cents at $27.47. --Written by Maria Woehr in New York. To contact the writer of this article, click here: Maria Woehr. To follow the writer on Twitter, go to http://twitter.com/newsgirlmw. To submit a news tip, send an email to: firstname.lastname@example.org.