December 21, 2017
Willkie represents Voya in deal to sell its Closed Block Variable Annuity segment (account value of approximately $35 billion) and fixed and fixed indexed annuities business (account value of approximately $19 billion) to an investor group.
On December 21, Willkie client Voya Financial, Inc. (NYSE:VOYA), announced that it will divest substantially all of its Closed Block Variable Annuity (CBVA) segment and its individual fixed and fixed indexed annuity business through an agreement with a consortium of investors led by affiliates of Apollo Global Management (NYSE: APO), Crestview Partners and Reverence Capital Partners.
In the transaction, Voya will divest Voya Insurance and Annuity Company (VIAC), the insurance subsidiary that has primarily issued Voya’s variable, fixed and fixed indexed annuities. VIAC will be acquired by Venerable Holdings, Inc., a newly formed investment vehicle owned by a consortium of investors led by Apollo, Crestview and Reverence. Athene Holding, Ltd. (NYSE: ATH), and Voya also will participate in this consortium, with Voya having a 9.9 percent equity stake in Venerable.
Following its acquisition of VIAC, Venerable will hold substantially all of the variable annuities in Voya’s CBVA segment with account value of approximately $35 billion based on June 30, 2017 balances. Concurrent with the sale of VIAC, Voya will sell via reinsurance to Athene its individual fixed and fixed indexed annuity policies with approximately $19 billion of account value as of June 30, 2017, representing the significant majority of Voya’s fixed and fixed indexed annuities in force. Voya intends to cease manufacturing non-retirement-focused individual annuities after the transaction closes.
Based on the terms of the agreement, Voya estimates that the transaction will result in approximately $1.1 billion of value. In addition to significantly reducing market and insurance risk, the agreement will enable Voya to focus on its higher-growth, higher-return, capital-light Retirement, Investment Management and Employee Benefits businesses.
The investors in Venerable are all well-established strategic investors with significant regulatory credibility and experience in successfully building and growing insurance businesses with patient, long-term capital. Upon closing of the transaction, Venerable will be conservatively capitalized. The investors in Venerable believe it is advantageous that the CBVA Business will operate as a private company, with a hedging strategy that will focus on the economic and regulatory stability of the underlying assets and statutory capital strength rather than reducing GAAP earnings volatility.
Serving the financial needs of approximately 13.6 million individual and institutional customers in the United States, Voya is a Fortune 500 company that had $11 billion in revenue in 2016. The company had $541 billion in total assets under management and administration as of September 30, 2017.
The Willkie deal team was led by partners John Schwolsky and Rajab Abbassi.
