Cowdery’s Resolution targets $3bn raise, with Blackstone as anchor & partner

Resolution Life, the legacy life insurance investments arm of insurance entrepreneur Clive Cowdery’s Resolution Group, is aiming to raise $3 billion in capital through a newly established perpetual capital vehicle, with Blackstone as an anchor investor and strategic partner to drive future growth.

Resolution Life takes on large books of life and annuities insurance business, using acquisitions or reinsurance backed by capital structures supported by institutional investors, channelling the returns and profits from the business back to investors in the form of dividends.

Today, Resolution Life and Blackstone have announced a strategic partnership to support the continued growth of the company as a life and annuity consolidator.

The arrangement will bring together Resolution Life’s global life insurance related liability management platforms and Blackstone’s insurance asset management capabilities, as well as bring capital from Blackstone strategies to Resolution Life’s new capital vehicle.

The plan is to raise $3 billion of new equity capital commitments, which will be seeded by a $500 million strategic investment from Blackstone, taking Resolution Life’s overall equity capital base to more than $8 billion.

The company has established a number of permanent capital structures over the years, to manage in-force portfolios of life insurance and reinsurance risk, to the benefit of the vehicles investor backers, which include financial institutions, insurance companies, pension plans, sovereign wealth funds and family offices.

The transactions entered into see Resolution Life effectively providing reinsurance for the legacy books of life business, in order to acquire the premium assets and manage them through to the policy conclusion.

The new $3 billion in capital is expected to be raised through a newly established perpetual capital vehicle with Blackstone serving as the General Partner.

The companies said that the majority of Resolution Life’s existing investors are likely to roll their investments into this new structure.

Nippon Life, which is the largest existing investor in Resolution Life, said that it supports the strategic partnership and “welcomes Blackstone’s investment and asset management expertise which will contribute meaningfully to the growth and development of Resolution Life.”

As part of the strategic partnership, Blackstone will be Resolution Life’s investment manager for certain asset classes, including directly originated assets across private credit, real estate and asset-based-finance markets.

It’s expected that Blackstone will manage up to $25 billion in the first year, growing to a over $60 billion over the next six years. This investment management partnership has commenced upon signing of the transaction.

The companies said the partnership will, “Allow Resolution Life to rapidly scale its growth path in a highly active acquisition market – continuing its mission of being a global custodian to life insurance and annuity policyholders.”

Sir Clive Cowdery, Founder and Executive Chairman of Resolution Life Group, commented on the news, “This partnership accelerates Resolution Life’s growth through access to Blackstone’s capital and investment capabilities. It is a continuation of Resolution’s 20-year mission to be the partner of choice for the life insurance industry and a custodian for its in-force policyholders globally.”

Gilles Dellaert, Global Head of Blackstone Insurance Solutions, added, “We believe that Blackstone’s world-class private credit and asset origination platform and Resolution Life’s leading position in the closed book consolidation market will be a powerful combination. We look forward to working closely with the Resolution Life team in the years ahead to help drive their growth and deliver greater financial security for policyholders.”

Jon Gray, President and COO of Blackstone, also said, “Clive Cowdery has built a tremendous insurance platform with Resolution Life. We are honored to partner with the company to deliver for its investors and policyholders.”

Resolution’s strategy and ability to attract capital to support its life insurance related opportunities, underscores the attractiveness of insurance and reinsurance-linked investment returns, as many of the larger institutional ILS fund investors also support these kinds of open and closed life book consolidation vehicles.

Using perpetual, or permanent, capital structures, allows Resolution Life to bring in new investors more easily to bolster its deal-making firepower, as well as providing a simpler structure for any investors to cycle out of in future, although it should be stressed these are generally long-term allocations, no matter the structure used.

But this is another example of institutional capital markets funding being used as reinsurance capital, to underwrite deals and acquire portfolios of risk, delivering insurance-linked returns to its investor backers through an equity-like structure.

The Blackstone partnership also reflects the attraction private equity and asset managers have to areas of insurance and reinsurance, which can provide significant premium float that can be invested in their strategies. Blackstone is a familiar name in many interesting and often investor backed re/insurance ventures.

Since 2003, Resolution Life and prior vehicles founded by Clive Cowdery have deployed around $18 billion of equity across multiple transactions, the company said.