US alternative investments manager Varde Partners and insurance technology firm Agam Capital have established a joint venture that will acquire, reinsure and manage complex life insurance, annuity, and reinsurance assets, with the former planning to invest US$500 million into those assets.
The partnership will combine Varde’s investment management expertise with the New Jersey-based technology firm’s proprietary insurance solutions platform, and will have the capability to price and manage complex insurance products with embedded market and actuarial risks, the asset manager says in a statement on October 9.
“It will serve as a turnkey solution for financial modelling and enterprise risk management to provide comprehensive economics solutions to life insurance companies,” Varde says.
A spokesperson for Varde tells Asia Asset Management that the company plans to invest $500 million into assets that will be serviced and supported by the joint venture, which is equally owned by the two firms.
According to Elena Lieskovska, partner and head of European financial services at Varde, there are “huge” opportunities in the $23 trillion global life insurance market, with life insurers “increasingly seeking risk mitigation solutions for legacy blocks of liabilities with multi-dimensional risks”.
“Given the current landscape of historically low interest rates and fundamental regulatory and accounting changes, we believe the opportunity across the $23 trillion life insurance industry is huge,” she says in the statement. “We are excited to expand Varde’s financial services footprint into insurance, and partner with Agam to provide alternative solutions to the industry.”
According to Avi Katz and Chak Raghunathan, co-founders of Agam Capital, the need for multi-dimensional solutions to the “complex changes facing the life insurance industry has never been greater”.
“Against this backdrop, we believe the combination of Varde’s core strengths in complex transactions together with Agam’s platform will create a world-class insurance solutions provider,” they say in the statement.
Varde, which has regional headquarters in Minneapolis, London, and Singapore, currently has $14 billion of assets under management, according to its website.