American Equity Investment Life last week rebuffed an unsolicited $4bn offer from a rival controlled by Paul Singer’s Elliott Management, capping a tumultuous year during which Bhalla also antagonised his company’s largest shareholder, Canada’s Brookfield Asset Management.
Underpinning the boardroom drama is Bhalla’s determination to keep AEL, one of the few independent annuities operators left, out of the wave of consolidation sweeping through the industry as private equity groups hoover up insurance assets.
The bad blood between Bhalla and Brookfield is a product of a deal that AEL entered into in November with start-up fund manager 26North, founded by the former longtime Apollo Global executive Josh Harris.
Bhalla had first turned to Brookfield in 2020 as it sought a white knight to fend off an earlier hostile bid from Apollo, where Harris worked at the time. Now with the Elliott bid out in the open, AEL and its $70bn of assets are in the crosshairs as a clutch of Wall Street investment titans circle the company.
Apollo, Brookfield, KKR, Carlyle Group, Ares and Sixth Street are among the many groups that could be bidders in a potentially frenzied auction next year.
Author(s): Sujeet Indap and Mark Vandevelde
Publication Date: 29 Dec 2022
Publication Site: Financial Times