Blue Owl Capital Inc., a $165 billion alternative asset manager, has announced its acquisition of insurance-focused asset manager Kuvare Asset Management. The planned $750 million acquisition will include an immediate $250 million purchase of preferred equity in Kuvare, which will provide growth capital to Kuvare’s insurance companies.
The acquisition, announced this week, aims to build out Blue Owl’s insurance offerings via a new unit, Blue Owl Insurance Solutions.
“The creation of Blue Owl Insurance Solutions represents a significant moment in Blue Owl’s journey,” said Doug Ostrover, a co-CEO of Blue Owl, in a statement. “Our acquisition of KAM allows us to provide broader solutions to the multi-trillion-dollar insurance market at scale.”
Kuvare Insurance Services LP, including subsidiary Kuvare UK Holdings Ltd., offers retail, institutional reinsurance, annuities and insurance advisory services.
“KAM’s capabilities in investment grade credit and real estate strategies supplement Blue Owl’s existing strength in these asset classes and further accelerate our ability to bring differentiated products and strategies to the market for Kuvare and third-party insurance clients,” said Ostrover.
The acquisition of Kuvare will increase Blue Owl’s AUM to $185.4 billion, based on its December 31, 2023, published total. The acquisition of Kuvare will add new investment strategies, including investment grade private credit, private and public ABS, and commercial real estate lending.
Blue Owl primarily invests in private credit and real estate. The fund’s asset allocation is 32% private credit, 12% collateralized loan obligations, 11% asset-backed securities, 11% mortgage-backed securities, 10% commercial mortgage loans, 6% cash and 6% other asset classes.
The acquisition, expected to close in the second or third quarter of the year, is the latest insurance and annuity provider acquisition made by private equity firms, as they firms try to gain a foothold in the $20 trillion global life and annuity market. Last year, KKR acquired the remaining stake in subsidiary insurance and annuity provider Global Atlantic for $2.7 billion.
Apollo pioneered the annuity provider buyout among its peers, forming insurer and annuity provider Athene Holding in 2009. Other firms have followed. Stone Point Capital and Mubadala acquired Truist Insurance Holdings last year in a $1.95 billion deal. In 2023 there was $6.35 billion invested in private equity-backed insurance broker deals, according to data from S&P.
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Tags: annuities, Blue Owl Capital Inc., Blue Owl Insurance Solutions, Doug Ostrover, insurance, Kuvare Asset Management, Kuvare UK Holdings, Pension Risk Transfer, PRT