Athene acquires $500m equity stake in Prudential subsidiary Jackson

Bermuda-domiciled Athene Holding is making a $500 million equity investment in Jackson National Life Insurance Company, a subsidiary of UK-based Prudential plc.

Athene has announced a fixed annuity block reinsurance transaction with Jackson. Athene will reinsure a $27 billion in-force block of fixed deferred and fixed indexed annuities.

Jackson will use the equity investment to pursue its growth initiatives aligned with its commercial diversification strategy.

Athene expects the transaction to be accretive to its adjusted operating income in 2021 and 2022, with potential upside as portfolio redeployment occurs. The insurer expects to deploy approximately $1.2 billion of total capital in connection with the transaction to be contributed over the next 12-18 months, including a further investment of capital in connection with portfolio redeployment, as well as the equity investment in Jackson. 63 percent of the total capital deployment will be funded by third-party investors, and 37 percent will be funded by Athene on a standalone basis.

“We are very pleased to announce this mutually beneficial transaction with Jackson, which further validates our business model and demonstrates the continued execution of our inorganic growth strategy,” said Jim Belardi, CEO of Athene. “This compelling transaction enables us to grow our gross invested assets by approximately 20% with predictable liabilities we know well. The deal was underwritten to a return that is consistent with our target for inorganic growth, with upside achievable through portfolio redeployment above forecasted levels. Importantly, the deal exemplifies Athene’s ability to act as a preferred solutions provider because of our robust capital position, deep expertise in the retirement services industry, and our ability to close transactions that build long-term shareholder value.”

Mike Wells, group chief executive of Prudential, added: “We are delighted to be forging a new relationship with the team at Athene, given their deep expertise in the US annuity sector and long-term commitment to its development. Athene is a high-quality, well capitalised reinsurer and, in coordination with its strategic partner, Apollo Global Management, has structured an attractive transaction which we believe will benefit all parties. This new agreement is a key step forward in meeting our strategic objectives for Jackson.”

Michael Falcon, CEO of Jackson Holdings, commented: “Today’s transactions with Athene, a leading franchise in the retirement services market, further strengthen our capital position and enhance our ability to grow. We value Athene’s investment in Jackson, which is aligned to our common goal of serving the growing population of American savers transitioning into and through retirement.”