American Equity Investment Life Holding Company, an issuer of general account annuities, and Adams Street Partners, a private markets investment management firm, have signed an agreement to form a joint venture for co-developing insurer products in middle market credit in the US.
American Equity has made an initial commitment of up to $2bn to the investment strategy.
As per the terms of the agreement, American Equity and Adams Street will set up a new management company that will sponsor and manage investment vehicles set up mainly to invest in secured loans to middle market private companies supported by private equity sponsors.
Adams Street comes with experience across the complete spectrum of private markets. It currently manages assets worth $44bn across primary, secondary, growth equity, credit, and co-investment strategies.
In the private credit segment, Adams Street pursues debt investment opportunities in middle market firms across the complete capital structure.
American Equity CEO Anant Bhalla said: “We are pleased to announce our intent to partner with Adams Street as part of diversifying our investing activity in secured, first line middle market credit and build a new business to bring this asset class to other insurers.
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“We expect this partnership model to be the blueprint for AEL’s execution of our 2.0 business model investment pillar with best in class asset managers in private credit and real assets. I am personally thrilled to partner with Jeff, Bill and team as we feel a strong sense of kinship with their risk and investment culture.”
Adams Street head of investments and managing partner Jeff Diehl said: “The partnership between Adams Street and American Equity is an exciting development for our private credit business. American Equity has exactly what we look for in a partner – a great culture, high-integrity people, and a focus on generating returns for investors.”
Adams Street partner and head of private credit Bill Sacher said: “We are very excited to be partnering with American Equity. The partnership will enable us to further expand our presence and capabilities as a lead lender to middle market companies backed by private equity sponsors while also creating attractive private credit assets for American Equity. This is an advantageous time in the market to be launching the venture and we look forward to building on this base.”
The partnership is expected to become operational in H1 2021.