-
FT reported::
KKR has agreed to buy Global Atlantic, the former life insurance unit of Goldman Sachs, in a $4.4bn deal that underscores how private equity firms are taking over the role of traditional financial institutions as lenders to millions of ordinary American households and businesses. The buyout group is using its own balance sheet to fund the deal, which will boost KKR's assets under management by a third, to $279bn.
Global Atlantic has significant liabilities. Shouldn't they add to KKR's LUM (liabilities under management)?
Private equity owning insurance companies and steering affiliate cash into parent investments is hardly an arm's length transaction. The Carlyle Group recently bought over 50% of Fortitude Re and can make capital calls on its affiliate.
Insurance regulators need to watch the myriad of ways PEU ownership will harm clients, deal fees, management fees and special dividends/distributions (most debt funded).
Update 9-27-21: ZeroHedge and WSJ noticed the pattern of PEU's buying life insurance portfolios.
Update 6-29-23: Investor Kirk Simon called out the PEU boys buying insurance companies and steering insurance reserves into their PEU offerings.
The whole private equity thing of buying up life insurance companies then investing the premiums just seems a bit sketchy.I'll shorten it to the whole private equity thing seems a bit sketchy.
