FNF has announced plans to invest $250m in its subsidiary (F&G).
F&G will use the proceeds from the investment for the expansion of its assets under management.
As of 30 September 2023, FNF owned an 85% stake in F&G.
Headquartered in Florida, US, FNF provides title insurance and transaction services to the real estate and mortgage sectors.
Iowa-based F&G is engaged in providing life insurance and annuity solutions to retail customers, as well as funding agreement and pension risk transfer to institutional clients.
In a statement, FNF said: “FNF views this as an attractive investment given F&G’s current momentum and performance, which has exceeded expectations, while still preserving the company’s excess liquidity as a buffer in response to market headwinds and historical low volumes in the title business.”
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At the end of September, FNF had $949m worth of cash and short-term liquid investments at the holding company.
A special committee comprising independent board members has been established by FNF’s board of directors to start assessing and negotiating the specifics of the investment, FNF added.
The FNF special committee will retain a separate financial adviser and legal counsel.
Subject to customary closing conditions, the transaction is expected to be completed by late 2023 or early 2024.
Last week, FNF announced its financial results for the third quarter of 2023.
The insurer’s net earnings attributable to common shareholders between July and September was $426m, a 17.6% increase from $362m in the same period last year.
Total revenue during the three months that ended on 30 September fell by 13% to $2.77bn year-on-year.