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Insurance companies have endless capital, money stays with them for a very long time. Apollo can invest rather than let it sit

 

Insurance companies have endless capital, money stays with them for a very long time. Apollo can invest rather than let it sit

 

Insurance companies have endless capital, money stays with them for a very long time. Apollo can invest rather than let it sit

 
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Echoing a bit of the previous comment. At this point the two companies have announced a merger whereby Apollo is buying all of Athene as far as I understand. In insurance, especially life / long-term policies you often find asset management businesses paired with those companies / liabilities. Idea is that the insurance side of the business goes out and raises money from customers in the form of policies like a life insurance policy and then invests the money over the life of the policy on behalf of the customer or as a way to fund a potential claim. Since the insurance companies are in the business of taking money today and paying money “tomorrow” they often have expertise or farm out expertise on how to invest the money well in the meantime. Hence apollo as an asset manager / investor is a good partner for them. Apollo gets a solid source of capital / quasi-permanent capital from Athene’s policy Holders and collects a fee for investing the money well. Athene is able to keep its promises to its policyholders. Win/win. I think KKR is now doing something similiar with Global Atlantic. BX and Carlyle may be doing stuff like this too. The big insurance companies for a while have generally had strong investing arms like Berkshire, MetLife (did a deal to buy Fortress’s credit business in 2016/2017 maybe), Fairfax, Markel, etc…

if the transaction closes between apollo and Athene then I think Athene will just be a subsidiary of Apollo. It will be the insurance sub. Prob still continuing to write policies and grow its premiums written / float it manages and Apollo will continue investing that money for Athene and collect a fee for doing that 

 

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