Sixth Street is shopping for coverage enterprise Talcott for $2 billion

• Sixth Avenue has agreed to acquire insurance policy organization Talcott Resolution for $2 billion, the most recent offer in a private-equity gold hurry in the coverage sector. 
• The acquisition fits inside of Sixth Street’s “Tao” platform, which serves as an all-objective expenditure vehicle to deploy funds in a variety of types.
• The offer is anticipated to close in the next quarter.  
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Investment decision agency Sixth Avenue Associates has agreed to acquire the insurance coverage corporation Talcott Resolution for $2 billion, the most recent signal that the non-public-equity marketplace is licking its chops at the extended-term, steady returns offered by annuities and lifetime insurance policies.

The asset class features lessen returns than classic private-equity buyouts. But with far more than $1 trillion in dry powder across the PE business, in accordance to PitchBook, investors have turned to deploying funds in numerous forms, and the insurance plan sector is turning into a nicely-trodden searching ground. 

Sixth Avenue has lifted as much as $25 billion in its Tao platform, a unit that serves to satisfy trader demand for promotions that don’t essentially in shape the typical takeover model: its cash back minority investments, immediate lending, infrastructure, renewable power and particular predicaments, even though it could also have interaction in substantial-scale leveraged buyouts if it pleases. 

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Assuming the offer closes in the next quarter as expected, Talcott will include to a growing listing of providers that in shape within just Tao’s all-needs mandate, resting less than its umbrella as a portfolio company. The insurance business will go on to be led by existing CEO Pete Sannizzaro.

Alan Waxman, co-founder and CEO of Sixth Road, in a statement named the acquisition a “substantial stage in our motivation to the insurance policy sector,” which the organization has poured hundreds of thousands and thousands of dollars into over the past month by itself. 

Past week, Sixth Street led a $500 million financial commitment in the startup insurance company and reinsurer, Convex, which adopted on the heels of a latest cash elevate of $1 billion from a consortium led by expenditure manager, Onex, and sovereign wealth fund GIC.

Sixth Avenue also previously invested in British isles pensions startup, Clara, and in Lifetri, a Dutch insurer.

In the Talcott transaction, Sixth Street is getting from a team of investors who have labored to grow the insurance plan business around the earlier a number of a long time, together with Cornell Money LLC, Atlas Service provider Cash LLC, TRB Advisors LP and World wide Atlantic Economic Group. 

“The Talcott Resolution group has a confirmed capability to initiate, execute, and produce benefits and we glance forward to continuing what the consortium started by their strategic financial commitment in the company’s progress,” mentioned Waxman.

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The insurance policy investment decision bonanza began in earnest in 2009, when Apollo International Administration set out to develop insurance policy company, Athene, with former American Global Team government James Belardi and has elevated its possession of the organization at any time because. 

The company has developed Athene considering that its inception, through acquisitions of coverage assets, such as Aviva Usa in 2013. Other non-public equity-corporations, which gain consistent and significant administration charges from possessing these companies, have adopted fit, including Blackstone and KKR.   

Final summer season, KKR acquired Worldwide Atlantic in a offer that placed the insurance company on its equilibrium sheet, a noteworthy variation from Sixth Street’s obtain, which pools trader bucks from restricted partners to finance the transaction, instead than acquiring the company as one particular of its have business enterprise arms. 

Sixth Street said it would receive Talcott’s $90 billion in liabilities and surplus, 900,000 buyers, and 600,000 annuity agreement holders. 

In latest times, Sixth Street’s Tao platform has also been liable for the acquisition of Legends Hospitality, the sports and entertainment events business co-owned by the Dallas Cowboys and New York Yankees.