Ltd., automotive fleet manager Donlen Corp., real estate investment and advisory firm Net Lease Capital Advisors Inc., U.K.-based asset finance company Haydock Finance Ltd and, subject to pending acquisitions, U.S. Key Apollo direct origination platforms include middle-market commercial finance company MidCap Financial LLC, specialized aircraft and aircraft engine lender PK AirFinance SA, collateralized loan obligation manager Redding Ridge Asset Management LLC, aircraft lessor Merx Aviation Finance LLC, Australia-based commercial real estate investment manager MaxCap Group Pty. These figures do not include the annual run-rates of $40 billion and $15 billion, respectively, in originations in Apollo's traditional private credit business nor its high-grade alpha business. Its five-year target for originations from those platforms is $60 billion or more, according to an October presentation. in a stock deal initially valued at $7.35 billion.īut rather than a means to cross-sell indexed annuities to consumers borrowing funds to pay for kitchen remodeling or vice versa, the pairing of Athene and Aqua Finance offers a further boost to the acquirer's already significant access to differentiated investments.Īpollo, which will manage Aqua Finance and is in the process of acquiring the shares of Athene that it does not already own, boasts an annual run-rate of about $25 billion in originations from its direct consumer and commercial finance platforms. Conseco Inc., a life and supplemental health insurer, memorably touted "extensive cross-marketing opportunities" when it agreed in April 1998 to acquire manufactured housing finance company Green Tree Financial Corp. all maintained significant consumer lending and/or residential mortgage operations during at least part of the 1990s, most of which they later sold in whole or in part as the notion of financial services convergence fell out of favor. of America and the predecessor to Principal Financial Group Inc. Life insurers such as Transamerica Corp., American General Corp., Prudential Insurance Co. What might appear to casual industry observers as an unusual marriage from an operational standpoint makes perfect sense in a financial context in the current environment. It also will benefit from Apollo's management expertise in the specialty finance arena. Those benefits may be individually incremental but collectively meaningful.įor Athene, which has already attained access to a diverse array of origination capabilities in large measure due to its relationship with Apollo Global Management Inc., the addition of Aqua Finance promises not only an additional supply of high-quality investable assets but also greater diversification by underlying borrower types. The TakeĪccess to direct origination platforms confers a competitive advantage to insurance companies during a time in which attractive new money investment yields remain difficult to find. Now, as most recently demonstrated by Athene Holding Ltd.'s proposed acquisition of a majority stake in home improvement lender Aqua Finance Inc., investment synergies are at the root of a new sort of convergence. The potential for sales-related synergies contributed to parent-subsidiary relationships between select life insurers and consumer finance companies decades ago.
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