Life insurance group Resolution Life is to become the strategic partner of asset manager Blackstone for new closed book transactions, including reinsurance, in the global life and annuity sector.
A joint statement from the two companies said, in return, Blackstone is to become the investment manager for Resolution Life in ‘certain key areas’, including directly originated assets across private credit, real estate, and asset-based-finance markets.
It is predicted to manage up to $25bn in the first year, growing to an expected $60bn over the next six years. The two firms also said that they plan to raise $3bn of new equity capital, including a $500m strategic investment from Blackstone that will bring Resolution Life’s total equity capital base to more than $8bn.
The companies said that the $3bn in capital would be raised through a newly established perpetual capital vehicle with Blackstone serving as the general partner and most of Resolution Life’s existing investors expected to roll their investments into this vehicle.
Sir Clive Cowdery, executive chairman, founder, and CEO of Resolution Life, will continue to lead the company.
He said: “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.”
In order to help take advantage of compelling market opportunities, the Blackstone investment management partnership has commenced upon signing of the transaction. The firms said that the partnership is expected to bring significant strategic and financial benefits in both the immediate and long-term. Closing is subject to regulatory approval and anticipated to occur in the second half of 2023.
Gilles Dellaert, global head of Blackstone Insurance Solutions, said: “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.”