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JAB Holding, the investment group behind Krispy Kreme, Pret A Manger and Coty, has struck its maiden US life insurance deal, buying a firm owned by hedge fund Elliott Management as part of a push into financial services.
The deal values Virginia-based Prosperity Life, which manages $25bn of assets, at more than $3bn, according to people familiar with the matter. It will put JAB in competition with Wall Street heavyweights such as Apollo Global, KKR and Brookfield in the fast-changing life insurance sector.
It comes as JAB, a sprawling European group best known for massive bets on well-known consumer brands, seeks to diversify into financial services under its new chief investment officer Anant Bhalla, a veteran insurance executive who it hired last May.
Bhalla who had transformed a sleepy Iowa insurer, American Equity Investment Life, into an aggressive participant in private markets before it was acquired by Brookfield last year for $4.3bn.
JAB overhauled some of its leadership last year and shifted focus after finding that a $50bn wave of takeovers during the post-crisis era of cheap debt had often failed to live up to expectations. Bhalla was brought on to lead JAB’s expansion into insurance after the group had already become an active buyer of pet insurance companies.
In an interview last year, JAB’s leadership explained that the steady returns generated by insurance assets were the best fit for what it described as the permanent capital of Germany’s billionaire Reimann family, whose wealth is managed through the group.
JAB traces its origins to a Mittelstand chemicals business that owned stakes in Reckitt Benckiser and Coty, and became a sensation in global dealmaking beginning in 2012 after creating a holding company to chase deals led by former Mars executive Olivier Goudet.
In the following decade, it spent tens of billions of dollars consolidating industries spanning coffee to quick-service restaurants, perfumes and veterinarian services — industries it believed carried steady demand. But after deciding returns on many deals had not met expectations, it pivoted to insurance, replacing Goudet with Joachim Creus, a longtime JAB insider.
Like other alternative asset managers, JAB has identified insurance as the next promising long-term frontier for its business. Insurance companies have emerged as some of the most popular targets on Wall Street, as managers look to tap their founts of capital.
Elliott Management — which manages about $70bn and is best known for its activist hedge fund — bought the life insurer in 2019 through its private equity business.
Afterwards, Prosperity embarked on an aggressive acquisition push that bolstered its overall assets. Prosperity made an unsolicited $4bn bid for AEL in late 2022, a deal Bhalla rebuffed at the time. It then acquired a rival life insurer for $1.9bn the following year.
https://www.ft.com/content/752a179c-4ad5-41ac-b281-1b7eb5c3eb76
