Apollo / Athene’s ACRA sidecar raise hits $3.2bn of commitments

Commitments to the Athene Co-Invest Reinsurance Affiliate (ACRA) insurance-linked sidecar vehicle have now reached an impressive $3.2 billion, as capital raising continued within the feeder fund managed by investor and private equity specialist Apollo Global.

The Athene Co-Invest Reinsurance Affiliate (ACRA) vehicle launched with a target for a capital raise of around $4 billion, as life, annuities and pensions focused insurance and reinsurance company Athene and its parent Apollo looked to enable third-party investors to participate in private deals alongside the firm.

The ACRA structure, which will operate as a kind of reinsurance sidecar fed by an investment fund managed by Apollo, will enable investors to participate alongside the insurer, so providing sidecar like capacity to support the kind of large reinsurance transactions that Athene tends to enter into and enabling investors to share more directly in the returns of this business.

Through July 2019 Apollo had reported that unfunded capital commitments for ACRA neared $1.5 billion.

Demand continued to rise and Apollo took capital commitments raised for ACRA to some $3 billion as of the end of the third-quarter of the year.

Commitments have continued to be made and Athene reported today that the Apollo/Athene Dedicated Investment Program (ADIP), the feeder style investment fund managed by Apollo that will help fund Athene Co-Invest Reinsurance Affiliate (ACRA), has now raised $3.2 billion.

Jim Belardi, CEO of Athene, commented today on the “strategic capital solution” ACRA, saying that it, “greatly enhances our capital flexibility and positions us as a solutions provider of choice amid a restructuring industry.”

Athene said that “additional commitments are expected to close in the coming months.”

Management fee income related to ACRA has now begun to show in Athene’s results, with $2 million earned in the fourth-quarter of 2019.

Of the $3.2 billion of commitments to ACRA, $2.6 billion remains undrawn and ready to be used when Athene has a suitably large reinsurance transaction on the table for investors to participate in.

The ACRA structure is just another way for Athene and parent Apollo to channel efficient capital from third-party investors into insurance and reinsurance deals.

But by leveraging the structuring of the insurance-linked securities (ILS) market, ACRA promises to provide investors with more direct access to the returns of Athene’s mega-deals, while helping the company make its own capital go much further.

As we previously reported, Athene co-founder and Chairman Chip Gillis said previously that ACRA is a reflection of Bermuda’s sidecar innovation.