Apollo / Athene’s ACRA 2 sidecar commitments reach $2bn at first close

Athene Holding Ltd., the life and retirement reinsurance company majority owned by investor and private equity specialist Apollo Global, now has access to more than $7 billion of deployable capital to purse “attractive growth opportunities” following the first close of the Apollo / Athene Dedicated Investment Program II with around $2 billion in capital commitments.

The Apollo / Athene Dedicated Investment Program II, or ADIP II, is the second edition of the innovative sidecar structure designed to augment Athene’s growth capacity via long-term, on-demand capital.

The approximately $2 billion in funding from the program will be invested directly alongside the company into Athene Co-Invest Reinsurance Affiliate Holding 2 Ltd., or ACRA 2, which is a consolidated subsidiary of Athene.

According to the company, with this first close for ADIP II, and including excess equity capital and untapped debt capacity, it’s expected that Athene will now have access to more than $7 billion in deployable capital, which it will use to pursue attractive growth opportunities in the retirement services marketplace.

The second vintage of the sidecar program builds on ADIP I, which, as we’ve covered on Artemis over the years, supported ACRA 1 from 2019, as it grew in size to become a reinsurance platform with over $60 billion of assets.

Like its predecessor, ACRA 2 provides sidecar-like capacity to support the large reinsurance transactions that Athene enters into, with investors sharing more directly in the returns of this business.

In February 2020, it was revealed that commitments to the ACRA 1 sidecar vehicle had reached an impressive $3.2 billion, after capital commitments raised as at August 2019 approached $1.5 billion.

In March 2021, it was announced that Apollo and Athene would merge in a deal valued at $29 billion, and later that year, Athene leveraged the ACRA structure in a large pension risk transfer transaction with security and aerospace company, Lockheed Martin.

Now, Athene has announced the first close of ADIP II with capital commitments of $2 billion, highlighting the success of this platform.

The company says that it witnessed strong investor demand for ADIP II, which is a testament to the strategy’s differentiation within investors’ portfolios, performance with downside protection, and significant alignment between Apollo, Athene, and third-party investors.

Athene Chief Executive Officer (CEO), Jim Belardi, commented, “The strategic partnership between Athene and Apollo only continues to get stronger, with full alignment achieved following the merger in early 2022 and significant profitable growth aspirations ahead.

“We continue to believe that funding a significant amount of our growth with participation from private, long-term third-party capital is a win-win scenario for our business and our investors, and we are excited about the road ahead.”