Värde Partners’s Partnership With American Equity and Agam

Kirkland & Ellis represented Värde Partners, Inc. in the transaction.

Värde Partners, Inc. (Värde), a leading global alternative investment firm, entered into its agreement to form a strategic partnership with American Equity Investment Life Holding Company (American Equity) (NYSE: AEL), a leading issuer of fixed index annuities, and Agam Capital Management, LLC (Agam), an insurance solutions provider. The partnership is intended to be finalized in the first half of 2021, pending regulatory approvals and customary closing conditions.

Under the terms of the agreement in principle, Värde will establish a Bermuda reinsurance company that would reinsure $5 billion of American Equity fixed index annuity liabilities. American Equity and Värde will also jointly establish an asset management entity to provide insurance asset management services to the reinsurance company. American Equity is intended to have a significant minority interest in the new reinsurer and a 35% interest in the newly formed asset manager.

Each of the three companies brings distinct capabilities to the partnership. American Equity brings distribution, policyholder service and administration, product development and insurance specific asset management expertise. Värde brings alternative asset management capabilities and Agam brings differentiated risk management solutions. By combining these complementary capabilities in a new reinsurance company and a new asset management entity, all three partners will benefit from the growth of the reinsurance business and assets under management.

American Equity Investment Life Holding Company, through its wholly-owned operating subsidiaries, is a leading issuer of fixed index annuities through independent agents, banks and broker-dealers.

Värde Partners is a leading global alternative investment firm with roots in credit and distressed. Founded in 1993, the firm has invested more than $70 billion since inception and manages over $14 billion on behalf of a global investor base.

Agam is a New Jersey-based insurance solutions provider, founded by Abraham Katz and Chak Raghunathan, senior executives from Apollo Global Management and Aflac Inc.

The Kirkland team advising Värde was led by transactional partners Rajab Abbassi (insurance; Picture), James Hu and Parimah Hassouri (insurance regulatory), and investment funds partner Scott Moehrke.

Involved fees earner: Rajab Abbassi – Kirkland & Ellis; Parimah Hassouri – Kirkland & Ellis; James Hu – Kirkland & Ellis; Scott Moehrke – Kirkland & Ellis;

Law Firms: Kirkland & Ellis;

Clients: Värde Partners;

Author: Ambrogio Visconti