Apollo Global’s Athene Plans to List Shares in December
November 24, 2016 by Maureen Farrell and Matt Jarzemsky
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
