KKR Agrees to Pay $2.7B for Full Control Over Annuity Issuer

KKR & Co. has agreed to pay $2.7 billion to acquire full control of Global Atlantic Financial Group, a life insurance and annuity insurer and reinsurer, from minority owners.

KKR already owns 63% of Global Atlantic’s stock. The minority-owner investors have 37%.

Global Atlantic is a major issuer of fixed annuities, with $4.5 billion in fixed-rate deferred annuity sales in the first three quarters of the year and $2.5 billion in non-variable indexed annuity sales, according to LIMRA.

Scott Nuttall, KKR’s co-chief executive officer, said Wednesday, during a conference call with securities analysts, that KKR is buying full control because it likes how Global Atlantic has performed in the face of COVID-19, geopolitical turmoil and the spike in interest rates.

“It’s even more stable than we thought,” Nuttall said. “We want to own more of those earnings.”

KKR is also hoping to increase sales of its own private wealth products, such as private credit and private real estate arrangements, through Global Atlantic’s distribution team, Nuttall said.

What it means: If Global Atlantic is offering annuities to clients, it may also start offering them private investment arrangements.

The genealogy: Goldman Sachs formed Global Atlantic in 2004, to serve as its reinsurance arm. The business acquired two other insurers, separated from Goldman Sachs in 2013 and then bought a third insurer, Forethought Life, in 2014.

KKR acquired what was originally a 60% stake in the Hamilton, Bermuda-based company in 2021.