Apollo Global Management, Inc. announced expansion of its insurance asset management business, as Athene Holding Ltd. has entered into a fixed annuity block reinsurance transaction with Jackson National Life Insurance Company, a subsidiary of Prudential plc, with the support of Athene Co-Invest Reinsurance Affiliate. Under the terms of the agreement, Athene will reinsure a $27 billion in-force block of fixed deferred and fixed indexed annuities. Athene will also make a $500 million equity investment in Jackson, representing an 11% stake in the company, subject to customary closing conditions1.
Apollo’s insurance platform is anchored by permanent capital vehicle assets from Athene and other insurance platforms. Through the first quarter of 2020 and pro forma for Athene’s transaction with Jackson, additional transactions and internal growth, Apollo has added nearly $80 billion in insurance-related assets under management. These inorganic growth strategies are underpinned by the Apollo strategic relationship, which provides acquisition expertise, access to significant equity capital raised both by Apollo and its insurance clients, and Apollo’s ability as an investment manager to source highly rated investment assets.
Apollo Co-Founder Josh Harris said: “This transaction serves as another great example of the strategic benefits of Apollo’s relationship with Athene and the full value Apollo’s insurance platform can bring to bear. Apollo, along with Athene and other insurance entities, have collectively invested approximately $1 billion to build out the infrastructure of expertise, technology, regulatory compliance and management necessary to efficiently and effectively perform as best-in-class operating companies. This infrastructure combined with available capital gives our insurance clients what we believe is a significant advantage in the marketplace. As our insurance asset management business continues to grow, we will continue to invest in these capabilities to serve our clients.”
Apollo Senior Managing Director Gary Parr said: “We believe Athene’s most recent deal exemplifies the competitive advantage of Apollo’s insurance clients and why they can be solutions providers to the industry. The transaction portfolio has a high percentage of short-term securities, of which the vast majority will be redeployed over the next 12-18 months into highly rated, longer term investments matching the liability profile, while maintaining a high capital position, strong ratings and prudent risk management. Apollo’s investment origination capabilities, which we think are not easily replicated due to the cost, human capital, expertise and scale that’s required for success, gives our clients confidence in underwriting investments.”
For Apollo, its insurance and permanent capital vehicle strategies are an important component of the growth targets set out in the second half of 2019, including achieving mid-teen percentages in annual growth in fee-related earnings over the next five years. The Firm expects this transaction will be immediately accretive; however, as a large percentage of the assets in Jackson are expected to be redeployed in other quality assets over time, the full financial effect is expected to be achieved on a run rate basis in the second half of 2021.
Apollo is a leading global alternative investment manager with offices in New York, Los Angeles, San Diego, Houston, Bethesda, London, Frankfurt, Madrid, Luxembourg, Mumbai, Delhi, Singapore, Hong Kong, Shanghai and Tokyo. Apollo had assets under management of approximately $316 billion as of March 31, 2020 in credit, private equity and real assets funds invested across a core group of nine industries where Apollo has considerable knowledge and resources. For more information about Apollo, please visit www.apollo.com.
About Athene Holding Ltd.
Athene, through its subsidiaries, is a leading retirement services company that issues, reinsures and acquires retirement savings products designed for the increasing number of individuals and institutions seeking to fund retirement needs. The products offered by Athene include:
Retail fixed, fixed indexed and index-linked annuity products;
Reinsurance arrangements with third-party annuity providers; and
Institutional products, such as funding agreements and the assumption of pension risk transfer obligations.
Athene had total assets of $142.2 billion as of March 31, 2020. Athene’s principal subsidiaries include Athene Annuity & Life Assurance Company, a Delaware-domiciled insurance company, Athene Annuity and Life Company, an Iowa-domiciled insurance company, Athene Annuity & Life Assurance Company of New York, a New York-domiciled insurance company and Athene Life Re Ltd., a Bermuda-domiciled reinsurer.