KKR acquires remaining stake in Global Atlantic for $2.7bn
KKR & Co Inc, the global investment firm, is to take sole ownership of Bermudian-based Global Atlantic Financial Group LLC.
The parties have announced a definitive agreement under which KKR will acquire the remaining 37 per cent stake of leading insurance company Global Atlantic for $2.7 billion in an all-cash transaction, increasing KKR’s ownership to 100 per cent.
Since 2021, KKR has served as Global Atlantic’s asset manager, offering access to its global investment and origination capabilities for the benefit of GA’s policyholders.
Joe Bae and Scott Nuttall, co-chief executives of KKR, said: “The strategic partnership we envisioned three years ago has exceeded our expectations.
“It has been transformative for both businesses and a great cultural fit that has enabled us to contribute to Global Atlantic’s continued strong performance and success, while also being a key driver of growth for KKR.
“We expect the new ownership structure will foster even closer collaboration, allowing us to fully leverage our complementary strengths and grow faster together.”
Allan Levine, chief executive officer of Global Atlantic, said: “We are taking this step because we have demonstrated over the last three years that we are stronger together.
“Being part of KKR has strengthened our position as a leading insurance company and enhanced our ability to deliver compelling solutions for our clients. Moving from a diverse group of shareholders to a single one with KKR clarifies our objectives and allows us to think — and invest — longer term.
“Although we hope to unlock further value by taking this step in our capital structure, neither our client-first approach nor our investment and risk management framework will change, and the day-to-day experience of our clients and colleagues will feel very much the same as it does today.”
The companies said Global Atlantic’s assets under management have grown significantly, up from $72 billion in 2020 to $158 billion today.
As Global Atlantic has grown, they said, it has benefited from the scale of KKR’s asset management businesses in meeting GA’s investment needs while maintaining a focus on risk management and continuing to deliver market-leading returns.
The strategic partnership has proven to be both an important source of capital for Global Atlantic and a driver of international growth, with Global Atlantic leveraging KKR’s global reach to establish new business relationships in Hong Kong, Singapore and Japan.
At the same time, the companies said, Global Atlantic has been a source of financial success for KKR and a key element of KKR’s growing real estate credit and asset-based financing businesses, both of which manage assets that are particularly well suited for insurance company balance sheets.
After closing, Global Atlantic will continue to be led by its management team and operate under the Global Atlantic brand.
The transaction, which is expected to close in the first quarter of 2024, is subject to customary closing conditions.