Alts Manager Ares Raises $2.3B for Life Insurance and Annuity Division

Ares Management Corp. announced Thursday that the alternative investment manager had raised $2.3 billion in commitments from investors to support its life insurance and annuity business, Aspida Holdings Ltd.

Ares launched Aspida in 2019 as an expansion of Ares Insurance Solutions, the firm’s insurance platform. As of September 30, 2024, Aspida had more than $19 billion in assets under management. The subsidiary also includes Aspida Re, which provides reinsurance.

The $2.3 billion fundraising is in addition to $700 million from Aspida, bringing total financing to $3 billion. The insurer has more than $1.5 billion in dry powder and is “well-positioned to meet the growing demand for retirement income and solutions,” Ares said in a statement, noting that the available resources could support more than $15 billion in new business.

“Propelled by secular tailwinds, including increased life expectancy, rising health care costs and elevated expenses, retirement planners have turned to annuities to offer enhanced after-tax returns,” said David Reilly and Ryan Myrick, partners and co-heads of Ares Insurance Solutions, in a joint statement. “We believe Aspida is well-positioned to capitalize on these trends and drive continued growth and value creation for its clients and investors.”

Alternative investment managers are increasingly seeking to take a portion of the growing retirement products market. According to the Investment Company Institute, retirement assets in the U.S. totaled $42.4 trillion in the third quarter of 2024, up 3.6% from the prior quarter. The assets included $15.2 trillion in individual retirement accounts, $12.5 trillion in defined contribution plan assets, $8.8 trillion in federal, state and local government defined benefit plans, $3.4 trillion in private sector DB plans and $2.5 billion in annuity reserves outside of retirement accounts.

In November 2023, KKR & Co. Inc. completed the full acquisition of insurance company Global Atlantic Financial Group. The private equity giant had acquired stakes in the insurer since 2021. Apollo Global Management Inc. acquired insurer Athene Holding Ltd. In 2021. Global Atlantic and Athene manage $158 billion and $355 billion, respectively.

According to McKinsey & Co., insurers backed by private-capital firms have gathered nearly $700 billion in AUM through 2023 and now command a 13% stake in the insurance industry, up from 1% in 2012.

Ares manages $464 billion in assets, including approximately $69.2 billion for 240 insurance clients.