Why private equity giants like KKR are buying life insurance companies - Business Insider

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KKR is looking to make a big push into life insurance with a $4.4 billion acquisition. Here's why private-equity giants keep elbowing in on the $30 trillion insurance industry.

Private-equity firms are starting to look a bit more like insurance investor Berkshire Hathaway.

Now, they're getting into far less sexy financial products that deliver a consistent stream of fees, albeit at a lower rate of return — like insurance. The deal, which is subject to regulatory approval, would position KKR next to investment behemoths Apollo Global Management, Blackstone, and The Carlyle Group, all of whom continue to turn around companies like the old days, but are now diversifying their portfolio with fixed annuities and long-term life insurance products.

Its growing pie of permanent capital — which the deal will bring from 9% to 33% of KKR's overall assets under management— means the firm can focus more on expanding Global Atlantic's business through acquisitions and increased sales of existing products, rather than fundraising, people familiar with the deal said.

Since then, Apollo has bought other insurance assets — notably, Aviva USA in 2013 — and increased its stake in Athene, to 35% from 17%.Blackstone got in on the game in 2017 when it bought fixed annuities and life insurance business Fidelity & Guaranty Life, now known as FGL Holdings Inc, for $1.87 billion. After, Blackstone sold the business to Fidelity National Financial for $2.7 billion.

 

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Private equity as a whole is scum. If they make their way into life insurance, they’ll collect a ton of money in premiums, and will pay out next to nothing in benefits. These bottom feeders need to be stopped.

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