After that, assuming business as usual, the combined company expects to deliver ~18% annual growth plus 2%+ dividend for several years. Further information is available at www.blackstone.com. In Europe, Athene has a big minority stake in Athora. The all-stock transaction implies a total equity value of roughly $11 billion for Athene. APO is quite confident that this segment will be profitable and will add about 10% to FRE+SRE net income though it deserves lower multiples. I primarily manage my own funds and consult a limited number of friends and clients. You can still enjoy your subscription until the end of your current billing period. Athene Share & Print. Athora Completes Acquisition of VIVAT and Provides a If you do nothing, you will be auto-enrolled in our premium digital monthly subscription plan and retain complete access for AU$89 per month. Unlike mergers with a high degree of execution risk, this union cements the coming together of two firms that have maintained a close partnership for more than a decade. WebAthene has acquired 11 companies, including 6 in the last 5 years. (7 min) Athene Holding signage displayed outside of the New York Stock Exchange during the companys 2016 IPO. Apollo, Athene To Merge In All-Stock Transaction - Bernews puzzled: As an after thought; did anyone collect part of it? Athora Holding Ltd. completes third capital raise, securing The merger of Apollo and Athene combines two growth companies providing products and services that are in high demand investment returns and retirement income. 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Athora continues to be supported by sovereign, pension and other institutional investors, demonstrating the high-quality and long-time horizon of its leading, institutional investor base. | We dedicate our focus, capital, time and technical insights to offering our customers a stable, long-term performance on our products. personalising content and ads, providing social media features and to You are currently accessing Risk.net via your institutional login. www.copyright.com. Planned growth, in line with historic results, is supposed to deliver a further 20%+ total return annually after that. [emailprotected] Please contact info@risk.net to find out more. Secondly, ATH's cash flows will be acquired at very low multiples, significantly below fair value. The plan presented does not account for the reduction of shares due to buybacks and additional growth spurred by $5B of investments. In the same calculations, I used 20-25 multiples. For Apollo and Athene, we will have total alignment to optimize our strategy and allocate capital efficiently, which will include rapidly scaling our capability to originate attractive risk/reward assets, which are the limiter of growth for both firms. Apollo and Athene have entered into an agreement to merge in an all-stock transaction that implies a total equity value of approximately $11 billion for $5B will be spent on a $1.60 annual dividend; another $5B are supposed to be spent in some combination of buybacks and dividend growth; finally, the remaining $5B will be reinvested in growth. Dow Jones Reprints at 1-800-843-0008 or visit www.djreprints.com. This alone implies a 20-50% return in slightly more than a year plus 2% in dividends. The closing is expected to take place within the first half of 2022 and is subject to the approval of the competent Authorities. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Challenger is a Sydney-based company that was founded in 1985. Such statements are subject to risks and uncertainties that could cause actual results, events and developments to differ materially from those set forth in, or implied by, such statements. Mar. Things cost more, the economy is a mess. If you do not want us and our partners to use cookies and personal data for these additional purposes, click 'Reject all'. What do you think of relative valuation vs. KKR, BX, BAM? Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Now hes battling BlackRock again, Insurance regulator agrees compromise solution to delay increase until 2024. If you would like to customise your choices, click 'Manage privacy settings'. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. The companies hope to complete that transactions by January 2022. Managing this part presents a unique challenge: due to the nature of liabilities, it must be invested in HIGH-GRADE debt only. The strategy of non-bank debt origination became particularly lucrative after the Financial Crisis. Using these multiples, we can expect APO to trade within $93-117 in early 2023 vs $78 today. personalising content and ads, providing social media features and to If you have any problems with your access or would like to request an individual access account please contact our customer service team. If you dont have a Risk.net account, please register for a trial. For ATH, underwriting a liability is similar to issuing a long-term bond or certificate of deposit. You are currently unable to copy this content. I have no business relationship with any company whose stock is mentioned in this article. Athene Holding Ltd. and its biggest investor are investing in Australias retirement services industry. Athene Holding signage displayed outside of the New York Stock Exchange during the companys 2016 IPO. You may also opt to downgrade to Standard Digital, a robust journalistic offering that fulfils many users needs. Aqua Finance is an exciting opportunity for Athene to invest in a leading consumer finance platform, to provide capital and expertise to continue to grow the business, and to execute on our strategy with Apollo to invest in high-quality origination platforms, said Jim Belardi, Chief Executive Officer of Athene. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. And 70% of ATH liabilities either cannot be terminated before maturity at all or carry surrender charges. Since its inception in 2018, Athora has raised circa 6.75 billion of total equity capital. Sizing Up the Potential Tax Benefits of Direct Indexing, Set Yourself Up for Success: How to Scale Your Advisory Practice for Growth, Customer Success Story: JFS Wealth Advisors Adds More Client Value, Creates Efficiency and Continues Compliance. Forward-looking statements within this press release include, but are not limited to, statements regarding future growth prospects and financial performance. All quotes delayed a minimum of 15 minutes. Apollo, together with certain of its related parties and employees, owns If youd like to retain your premium access and save 20%, you can opt to pay annually at the end of the trial. You can still enjoy your subscription until the end of your current billing period. Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. For more than three decades, Aqua has partnered with merchants to provide flexible consumer lending solutions, and with Athene we look forward to investing in the business and supporting the Aqua team to build on this success, said Apollo Co-President Jim Zelter. Entering text into the input field will update the search result below, will have two resilient and quickly growing sources of cash flow: fee-related earnings (FRE) from Apollo and spread-related earnings (SRE) from Athene. Join over 300,000 Finance professionals who already subscribe to the FT. During your trial you will have complete digital access to FT.com with everything in both of our Standard Digital and Premium Digital packages. organisation Athora Apollos business will continue to be led by Co-Presidents Scott Kleinman and James Zelter. Our focus is on growth through consolidation, which creates value through capital synergies You can think of Athene resembling a bank more than any other insurance company with premiums replacing CDs and without fickle short-term deposits. Get alerted any time new stories match your search criteria. The company will operate in an environment powered by strong market and demographic trends., Apollo Co-Founder and incoming CEO Marc Rowan said, This merger is all about alignment between Apollo and Athene, amongst Apollos stockholders and with our limited partners. I have no business relationship with any company whose stock is mentioned in this article. Like Athene, Athora is partly backed by private equity group Apollo. Apollo (including Athene) has committed 600 million in total as part of this capital raise, as previously announced on 2 November 2022. But how to achieve a higher yield? The base case scenario does not account for it though one of the investees is improving APO's internal operating environment right now with more to follow. Europes life insurers fall into the hands of private equity Expert insights, analysis and smart data help you cut through the noise to spot trends, The two groups are linked through strategic relationships which involve Apollo providing Athora with advisory services on direct investment management, asset allocation, asset due diligence, mergers and acquisitions, among others. Apollo has owned a 35% stake in Athene since 2009, and it recently completed an effort to acquire full control of Athene. 06 Jul 2017 LED and automotive lighting firm moves into private equity ownership, with Philips retaining a minority stake. Media: Apollo Joanna Rose Global Head of Corporate Apollo and Athene to Merge in All-Stock Transaction Until 2026, APO is expected to generate about $15B of capital. There are only four types of liabilities on its balance sheet: retail annuities, pension group annuities, funding agreements, and flow reinsurance ceded by other annuity underwriters. Find out more about how we use your personal data in our privacy policy and cookie policy. Our Standards: The Thomson Reuters Trust Principles. Athora is a leading European savings and retirement services group. One thing to understand: even though it issues annuities and provides retirement services, ATH is not a life insurer and does not have to deal with things like mortality or longevity, traditional life insurance, or long-term care. Athene does not undertake any obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results. Blackstone would also maintain a minority stake in the Company. APO has made significant investments in fintechs. Existing Apollo shareholders will own about 76% of the combined company, and Athene investors will own the rest. And it still seems to be the weakest link in the post-merger strategic plan. Try full digital access and see why over 1 million readers subscribe to the FT, Purchase a Trial subscription for AU$1 for 4 weeks, You will be billed AU$89 per month after the trial ends, Smart data to help spot risk and opportunity, Lex, our agenda-setting business commentary (Premium only), Due Diligence, an exclusive M&A newsletter (Premium only). offers FT membership to read for free. New to Risk.net? The companies have been closely affiliated since the very beginning: APO seeded ATH in 2009, has been managing its investment portfolio, sourced inorganic transactions, and both companies hold significant stakes in each other. We use Or we can formulate the same issue differently: originating loans at the required scale ($80B annually with $150B as a 3-5 year target), can APO avoid damaging credit losses? In 2022, the combined company is expected to deliver $4.67 net income from these two sources. (to attract clients to Athene). For non-personal use or to order multiple copies, please contact Infopro Digital Risk (IP) Limited (2023). Apollo-Athene Merger Creates Key Financial Player, Explained It will be eliminated after the merger. WebThe institutional channel includes reinsurance and group annuity contracts related to pension risk transfers. And it further aligns interests with our fund investors, giving us a bigger balance sheet to invest alongside clients in our various fund products., Apollo Founder and Chairman Leon Black said, Apollo occupies an enviable position in our industry, and we have been keenly focused on how to evolve our differentiated platform for long-term success. By Rachel Curry. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. But this risk is less important because most of Athene's liabilities will not be paid until their maturity. It would be practical to own this type of holding, rather than separate managers. SEC.gov The two firmsannounced in March that Apollo is trying to merge with Athene through a stock swap that would leave Apollo shareholders with a 76% stake in the combined company. Generally, forward-looking statements include actions, events, results, strategies and expectations and are often identifiable by use of the words believes, expects, intends, anticipates, plans, seeks, estimates, projects, may, will, could, might, should, or continues or similar expressions. For Apollo: Investors:Noah GunnGlobal Head of Investor Relations(212) 822-0540IR@apollo.com, Media:Joanna RoseGlobal Head of Corporate Communications(212) 822-0491Communications@apollo.com, For Athene: Investors:Alex Pelzar+1 646 768 7316apelzar@athene.com, Media:Marcia Kent+1 515 342 3918mkent@athene.com, For Blackstone:Matt AndersonMatthew.Anderson@blackstone.com518-248-7310. VIVATs life and asset management businesses are now part of Athora, a leading life insurance and reinsurance group in Europe Athora has sold 100% of the Check if your These are cash earnings, not vulnerable to market turbulence or economic cycles, and growing at about 18%. Analysts Disclosure: I/we have a beneficial long position in the shares of APO, ATH, BAM either through stock ownership, options, or other derivatives. For cost savings, you can change your plan at any time online in the Settings & Account section. I wrote this article myself, and it expresses my own opinions. Change the plan you will roll onto at any time during your trial by visiting the Settings & Account section. It bought the Belgian operations of insurer Generali (GASI.MI) in 2018 and Dutch insurer Vivat in 2019. Under Apollo's umbrella (but on Athene's balance sheet), there are many credit shops staffed with former bankers that originate loans in their particular niche of expertise. Why 1966 Was the Worst Year to Retire (and Why It Matters in 2023), Today's 50-Plus Investor Wants Adventure, and Certainty, Generali to Take Control of Conning From Cathay Life, Ransomware Gang Has 6M Life and Annuity Client Records, American Equity Agrees to $4.3B Offer From Brookfield Re, Nassau Financial Acquires Delaware Life of New York. High FRE growth planned by APO seems very doable, especially in the current favorable low-rate environment. The slide below illustrates this situation: Diversification of loan originations is important as a way to withstand industry cycles. Aqua Finance has a long history of partnering with merchants across the home improvement and recreational ecosystem to provide dependable and flexible financing solutions to their customers. organisation A statement from Apollo said, Under the terms of the transaction, each outstanding Class A common share of Athene will be exchanged for a fixed ratio of 1.149 shares of Apollo common stock. Any changes made can be done at any time and will become effective at the end of the trial period, allowing you to retain full access for 4 weeks, even if you downgrade or cancel. Lazard and Goldman Sachs are serving as financial advisors and Weil Gotshal & Manges LLP as legal counsel to Blackstone and Aqua Finance. - to Athora Holding Ltd. ("Athora"). However, Investor Day provided plenty of data to alleviate this concern. It was announced on March 8, 2021: in an all-stock tax-free transaction, ATH shareholders will get 1.149 shares of APO in exchange for 1 share of ATH. Please. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/. university A smaller part of its AUM consists of private equity funds funded primarily by big institutional investors. All forward-looking statements described herein are qualified by these cautionary statements and there can be no assurance that the actual results, events or developments referenced herein will occur or be realized. Coast Guard in custody of debris? analyse how our Sites are used. Roger: Of course it is. We use July 07, 2021 at 10:00 AM Plumb job: can Basel III unblock US credit risk transfer? Apollo Global Management will acquire affiliated insurer Athene in early 2022. WebAthora | 9,505 followers on LinkedIn. I/we have a beneficial long position in the shares of APO, ATH, BAM either through stock ownership, options, or other derivatives. Athene specializes in helping its customers achieve financial security and is a solutions provider to institutions. The size and the corporate governance change will make APO eligible for S&P 500. See here for a complete list of exchanges and delays. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. Please use your existing password to sign in. On March 8, Apollo Global Management See here for a complete list of exchanges and delays. Barred Broker Accused of Bilking Gold Star Families as Army Counselor, California Replaces a Trust Investment Law. Both approaches increase yield but incur high risks. WebOn 1 January 2022, Athene merged into a wholly-owned subsidiary of Apollo Global Management, Inc. As a result of the merger, Athene became a wholly-owned subsidiary ATH carries excess capital on its balance sheet but if you exclude it from calculations, its ROE jumps from an enviable 16% to 23%! The oba is dead! Athora is a private company similar to Athene but focused on Europe. You may change or cancel your subscription or trial at any time online. In today's market, they are valued at more than 25 multiple, and under almost any scenario, they should deserve at least 20 multiple. Apollo to sell Italy's Amissima Vita to life insurer Athora For a full comparison of Standard and Premium Digital, click here. I will present only one slide here but on Apollo's and Athene's websites, you can find more details including stress test results for Athene's portfolio. and other data for a number of reasons, such as keeping FT Sites reliable and secure, Risk.net, FX Markets.com, WatersTechnology.com, Central Banking.com, PostOnline.co.uk, InsuranceAge.co.uk, RiskTechForum.com and Chartis-Research.com. 3) On the asset side, it is becoming harder to find deals with record private credit fund raisings in 2021 and must compensate for at least 3% cost of funding (to attract clients to Athene). We may not know the answer until the next credit crisis. As a long-term savings and retirement services group, the support of an investor base with a long-term focus positions Athora uniquely in the industry., Athora Holding Ltd. completes third capital raise, securing approximately 2.75 billion of additional common equity commitments, Press release Fundraise completion Dec 2022. It is simply very hard for Apollo stock to rise given that 1) 10 yr Treasuries are trading at 2.8%, which means Athene's clients will no longer outsource liability mgt to Athene which only gives around 2.5%. Athene and the investment company, Apollo Global Management Inc., say they have agreed to pay $540 million for a 15% stake in Challenger Ltd., afirm that sells annuities and investment management services in Australia. EUs late CDS transparency push triggers trader fears, Dealers tackle US Libor swaptions transition, California Residents Do not sell my personal information. In my simple calculations at the very beginning, I completely neglected PII income. Premium Digital includes access to our premier business column, Lex, as well as 15 curated newsletters covering key business themes with original, in-depth reporting. Request academic re-use from Apollo's merger with Athene highlights PE's rush for permanent analyse how our Sites are used. This is Apollo's promise in a nutshell. There will be no change to the platform, day-to-day portfolio management or investment processes and approvals. Athene says it also is pursuing new business initiatives in Japan. Apollo and Athene have entered into an agreement to merge in an all-stock transaction that implies a total equity value of approximately $11 billion for Athene, it has been announced. Again, it is not different from what it has been doing since 2009. Consolidation is sweeping through Italy's insurance sector where market leader Generali (GASI.MI) will launch a 1.17 billion euro takeover bid for smaller rival Cattolica (CASS.MI), with the offer starting on Oct. 4. or Athene has already made significant investments in Singapore, Australia, and signed two reinsurance contracts in Japan. Pembroke, Bermuda, 15 December 2022 Athora Holding Ltd. (Athora or the Group), a leading European savings and retirement services group, has completed its third capital raise, securing a total of approximately 2.75 billion of additional permanent equity capital commitments from new and existing shareholders, including commitments of over 2.0 billion announced on 2 November 2022. Due to the affiliation between the two companies, the market had considered Athene as APO's captive insurer with its main mission to supply AUM (assets under management) fodder to generate Apollo's management fees. The slide below from the recent, illustrates the current (Q2 21 LTM) and projected EPS on a. cash earnings, not vulnerable to market turbulence or economic cycles, and growing at about 18%. LOL - the real one: But electric buses will save money! Athene Our Organisation | Athora Try full digital access and see why over 1 million readers subscribe to the FT, Purchase a Trial subscription for $1 for 4 weeks, You will be billed $69 per month after the trial ends. If youd like to retain your premium access and save 20%, you can opt to pay annually at the end of the trial. So, what is the motivation? Athene a Hamilton, Bermuda-based annuity issuer that ended the first quarter with about $206 billion in total assets and Apollo started out with a 3% stake in Challenger. Compare Standard and Premium Digital here. Athene During your trial you will have complete digital access to FT.com with everything in both of our Standard Digital and Premium Digital packages. Distribution and use of this material are governed by Through our subsidiaries, we focus on both growing our franchise, via acquisition, transfer or reinsurance of portfolios Athene holds a significant stake in Athora. Apollo Global Management Inc. said it is buying the portion of Athene Holding Ltd. it doesnt already own, in a move to consolidate the investment giants ownership of its highly successful insurance affiliate. If you have any problems with your access, contact our customer services team. Challenger has about $78 billion in total assets under management. March 8, 2021. Apollo's Investor Day. 4) Apollo has some PE funds that equities that are awaiting exits this year but with low valuation in general, this means hard to exit & also raising new money for the new PE fund. Blackstone to Maintain Minority Investment in Aqua Finance, Specialist Platform on Track to Originate $2 Billion of Loans in 2021. Apollos portfolio of proprietary origination platforms help the firm to originate high-quality, recurring assets for its investors, including Athene. If you have an ad-blocker enabled you may be blocked from proceeding. Through our investment activity across our fully integrated platform, we serve the retirement income and financial return needs of our clients, and we offer innovative capital solutions to businesses. Coming together in this merger is a logical and exciting next step that will simplify our relationship while driving significant strategic and financial benefits in both the immediate and long-term future.. It now has the equivalent of about $15 billion in life investment assets, in U.S. dollars, about $78 billion in total assets under management. Apollo has a 6% stake and four board members in Athora, according to the insurer's website. View our subscription options. Athene's ROE has been so high primarily because Apollo came up with a creative strategy called fixed income replacement. I wrote this article myself, and it expresses my own opinions. The key benefits of the merger will be derived from increased coordination and alignment, not consolidation. Apollo Global to buy annuities provider Athene in $11 billion deal Listen to free podcasts to get the info you need to solve business challenges! f. Insurance Business Written by Business Segment and Geographical Region Please contact info@risk.net to find out more. In the current low-yield environment, insurers at the open market or through private transactions can either purchase a lower-grade debt or hunt after a longer duration. This is possible only because Athene can supply massive amounts of low-cost capital. 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Mike Wells, Athora Group CEO, commented The completion of this capital raise will allow Athora to further enhance its position as a leading European savings and retirement services group, and demonstrates the strength of our business model and growth strategy. It is called p s p. Mr S - offhand do you, or any reader, know of a CEF, ETF, or other product that holds multiple asset managers. BOS is a hub for all of New England. What I have presented so far is the base case scenario.