Brookfield Announces Strategic Partnership with American Equity Life
BROOKFIELD, NEWS, Oct. 18, 2020 (GLOBE NEWSWIRE) — Brookfield Asset Management Inc. (“Brookfield”) (NYSE:BAM, TSX:BAM) today announced a strategic partnership with American Equity Investment Life Holding Company (“AEL”) (NYSE:AEL), a leading retirement planning annuity provider. The partnership establishes Brookfield as a 19.9% cornerstone investor and reinsurance counterparty of AEL, supporting continued growth opportunities for the business.
AEL specializes in the sale, through independent agents, banks, and broker dealers, of fixed index annuities. These investment products support individuals in preserving their retirement dollars and provide a secure, predictable income.
The partnership reflects a meaningful investment for Brookfield in one of the leading originators for fixed index annuities and has the following strategic components:
- Brookfield will acquire a 19.9% ownership interest in the common shares of AEL in two stages: an initial purchase of a 9.9% interest at $37.00 per share promptly following required regulatory approval, and a second purchase of an incremental 10.0% interest, at the greater value of $37.00 per share or adjusted book value per share. The second equity investment is subject to finalization of certain reinsurance agreement terms, receipt of applicable regulatory approvals and other closing conditions and is expected to close in the first half of 2021. Brookfield will receive one seat on American Equity’s Board of Directors following the initial equity investment.
- A reinsurance transaction through which Brookfield’s reinsurance and annuity subsidiary, Brookfield Asset Management Partners, will reinsure up to $10 billion in annuity liabilities, including an initial $5 billion of existing liabilities and up to an incremental $5 billion of future business when written.
- AEL will receive unique access to Brookfield’s attractive alternative asset strategies, which positions AEL to generate sustained returns in a low interest rate environment.
Sachin Shah, Brookfield’s Chief Investment Officer, said: “We are pleased to be investing in American Equity and to partner with the business in reinsurance as it grows its leading position as a retirement planning annuity provider. This transaction represents a meaningful investment for us in the attractive U.S. insurance market …