Apollo Global's Athene Plans to List Shares in December
24 November 2016 - 7:20AM
Dow Jones News
Athene Holding Ltd. is planning to go public in December, in a
long-awaited debut that could value the fixed-annuities provider at
more than $7 billion and end a dismal year for IPOs on a positive
note.
The initial public offering of Athene, backed by private-equity
firm Apollo Global Management LLC, is expected to raise $1 billion
or more, people familiar with the matter said.
That would make it one of the largest new issues in a year that
is on track to be the slowest for U.S.-listed IPOs since 2009. Only
four companies have raised more than $1 billion in IPOs this year,
according to Dealogic.
Athene's senior executives and bankers are expected to hit the
road as soon as next week to drum up interest in the shares among
investors, according to the people. New issuers typically hold
about two weeks of such roadshow meetings before their shares are
sold and begin trading.
Insurance stocks, including Ameriprise Financial Inc. and others
who compete with Athene, have rallied following Donald Trump's
unexpected victory over Hillary Clinton earlier this month.
Investors are betting that rising interest rates could benefit
insurers and that Mr. Trump could roll back regulations on the
industry.
Formed in 2008, Bermuda-based Athene has expanded swiftly to
become a dominant player in fixed annuities, providing them to
hundreds of thousands of retirees and other consumers.
Fixed annuities are savings contracts, somewhat akin to bank
certificates of deposit, that promise to pay buyers a set amount of
interest each year. Insurers can profit by earning more on
investments backing the products than they pay out. Fixed annuities
are popular with risk-averse, middle-income savers.
Athene's growth has been a boon to Apollo, which earns fees
overseeing credit, real-estate and other investments backing the
insurer's annuity products. The New York asset manager either
managed or advised on $71.8 billion of assets in accounts owned by
or related to Athene as of Sept. 30, up from $2 billion in 2010.
Athene's assets accounted for more than one-third of Apollo's total
of more than $188 billion under management as of September. Apollo
affiliates raked in $268 million in asset-management and
sub-advisory fees related to Athene last year, according to
regulatory filings.
Fees from the arrangement have lent stability to Apollo's
earnings, appealing to shareholders who have eyed Apollo and its
publicly traded peers with some skepticism due to the perceived
boom-and-bust nature of private-equity investing.
The insurer's IPO stands to benefit executives at the buyout
firm who own shares or will after the offering, including Apollo
co-founder Marc Rowan, according to regulatory filings.
Apollo, which filed initial IPO paperwork in May, has indicated
for years it plans to take Athene public, and a debut was expected
late this year or early in 2017.
Athene's rapid growth earlier this decade has made it a focus of
a regulatory debate about whether private-equity firms and other
nontraditional buyers of annuity-focused insurers might be taking
excessive risks in pursuit of profits. State insurance regulators
in recent years adopted stiffer rules and procedures for reviewing
acquisitions.
Investors have been closely watching new rules announced by the
Labor Department earlier this year that overhaul how brokers and
financial advisers work with retirement savers, holding them to new
standards for charging commissions. The regulations are set to take
effect next year. Mr. Trump hasn't directly addressed the rules,
but one of his top advisers, hedge-fund investor Anthony
Scaramucci, has said publicly that they should be repealed.
Leslie Scism contributed to this article.
Write to Maureen Farrell at maureen.farrell@wsj.com and Matt
Jarzemsky at matthew.jarzemsky@wsj.com
(END) Dow Jones Newswires
November 23, 2016 15:05 ET (20:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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