Alternative asset manager Blue Owl Capital has announced a definitive agreement to acquire Kuvare Insurance Services LP (also known as Kuvare Asset Management) for $750 million.
KAM, a specialized investment management firm, caters to the insurance industry, including Kuvare UK Holdings (Kuvare), by providing asset management services.
The acquisition is planned to be financed through a mix of $325 million in cash and $425 million in Blue Owl Class A common stock.
Anticipated to be completed in the second or third quarter of 2024, Blue Owl says that the acquisition’s closure is dependent on receiving standard regulatory approvals and satisfying other customary closing conditions.
Upon finalizing the KAM purchase, the majority of KAM’s employees are slated to transition to Blue Owl. The deal includes the potential for an additional earnout of up to $250 million, contingent on reaching specific future revenue benchmarks.
Simultaneously, Blue Owl has bolstered a long-term partnership with Kuvare by acquiring $250 million in preferred equity, designed to foster a lasting relationship between the two entities, providing Kuvare’s insurance companies — which will now also serve as Blue Owl’s new asset management clients — with growth capital.
Since its inception in 2015, Kuvare has operated multiple insurance and reinsurance businesses, dealing in fixed and indexed annuities in the US.
In conjunction with the preferred equity investment, Blue Owl and Kuvare have also formalized investment management agreements (IMAs) allowing Blue Owl to manage up to $3 billion of assets. These funds will be spread across Blue Owl’s credit, GP strategic capital, and real estate investment platforms, with room for future growth.
While Kuvare will continue overseeing the asset allocations for its insurance operations and strategic investments, the IMAs will bolster Blue Owl’s permanent capital base and enhance Kuvare’s investment capabilities.
Doug Ostrover, co-CEO of Blue Owl, emphasized the acquisition’s significance and welcomed the creation of Blue Owl Insurance Solutions.
“Our acquisition of KAM allows us to provide broader solutions to the multi-trillion-dollar insurance market at scale,” Ostrover said.
Marc Lipschultz, Blue Owl’s other co-CEO, also highlighted the mutual benefits of the preferred equity investment in Kuvare.
“This partnership with Kuvare anchors Blue Owl’s expanding presence in the insurance channel, greatly complementing our robust institutional and wealth footprint and further diversifying the markets for which we provide investment solutions,” Lipschultz said.
Lastly, Kuvare founder, chairman, and CEO Dhiren Jhaveri called the collaboration an “important and exciting step in the evolution” of the company.
“We always strive to be excellent stewards of assets entrusted to us by our policyholders and reinsurance partners, and the team at Blue Owl has demonstrated a unique commitment to helping us achieve our goals. We especially look forward to continued collaboration with our many valued KAM colleagues who will join the Blue Owl team at the close of this transaction,” Jhaveri said.
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