Blue Owl Capital Inc. (NYSE: OWL), a prominent alternative asset manager, has announced a definitive agreement to acquire Kuvare Insurance Services LP, doing business as Kuvare Asset Management (KAM), for a total consideration of $750 million.
KAM, known for its specialized asset management services tailored to the insurance sector, will be integrated into Blue Owl’s operations, with the transaction comprising $325 million in cash and $425 million in Blue Owl Class A common stock.
Doug Ostrover, Co-CEO of Blue Owl Capital said: “The creation of Blue Owl Insurance Solutions represents a significant moment in Blue Owl’s journey. Our acquisition of KAM allows us to provide broader solutions to the multi-trillion-dollar insurance market at scale.
KAM’s capabilities in investment grade credit and real estate strategies supplement Blue Owl’s existing strength in these asset classes and further accelerate our ability to bring differentiated products and strategies to the market for Kuvare Asset Management and third-party insurance clients.”
The acquisition, slated for completion in the latter half of 2024, is contingent upon standard regulatory approvals and closing conditions. Post-acquisition, the majority of KAM’s workforce is expected to transition to Blue Owl, with an additional earnout potential of up to $250 million based on future revenue milestones.
Marc Lipschultz, Co-CEO of Blue Owl Capital said: “Our preferred equity investment in Kuvare reflects our confidence in the growth trajectory of the business; both through its extensive distribution network and proven reinsurance strategy.
This partnership with Kuvare anchors Blue Owl’s expanding presence in the insurance channel, greatly complementing our robust institutional and wealth footprint and further diversifying the markets for which we provide investment solutions. In aggregate, we believe these transactions reflect a creative approach to expanding our offerings for the insurance market at an attractive price.”
Concurrently, Blue Owl has fortified its relationship with Kuvare Asset Management through a strategic $250 million preferred equity investment, fostering a long-term partnership and injecting growth capital into Kuvare’s insurance ventures.
This move positions Kuvare’s insurance entities as new asset management clients for Blue Owl. Kuvare, a tech-forward financial services entity established in 2015, has rapidly ascended as a leading annuity provider in the U.S. market.
Further cementing this alliance, Blue Owl and Kuvare have executed investment management agreements (IMAs) enabling Blue Owl to manage up to $3 billion in assets across its diverse investment platforms, with the potential for expansion.
Following the KAM acquisition, Blue Owl’s assets under management (AUM) are projected to increase by $20 billion. Kuvare will retain oversight of its asset allocations and strategic investments, while Blue Owl’s IMAs will contribute to its permanent capital base and augment Kuvare’s investment prowess.
This series of transactions is anticipated to positively impact Blue Owl’s financial performance in 2024. A consortium of financial advisors, including Ardea Partners LP and PJT Partners LP for Blue Owl, and J.P. Morgan Securities LLC for KAM, have been instrumental in facilitating these deals. Legal advisement was provided by Kirkland & Ellis LLP for Blue Owl and Sidley Austin LLP for Kuvare. The financial community awaits the fruitful results of these strategic moves in the asset management landscape.
Dhiren Jhaveri, Founder, Chairman and CEO of Kuvare added: “It is an important and exciting step in the evolution of Kuvare to associate in such an impactful way with an asset manager of Blue Owl’s caliber.
We always strive to be excellent stewards of assets entrusted to us by our policyholders and reinsurance partners, and the team at Blue Owl has demonstrated a unique commitment to helping us achieve our goals. We especially look forward to continued collaboration with our many valued KAM colleagues who will join the Blue Owl team at the close of this transaction.”
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