Global Atlantic launches Ivy, a $1bn sidecar-like life & annuity co-investment vehicle

Global Atlantic Financial Group Limited, a leading United States life, retirement and annuities insurance and reinsurance company, has launched an intriguing co-investment vehicle named Ivy, which will operate as a kind of sidecar structure and is funded with $1 billion to invest in life and annuity reinsurance deals.

The company announced the launch of Ivy Co-Investment Vehicle LLC, sponsored by Global Atlantic, which has been designed to co-invest roughly $1 billion into qualifying reinsurance transactions alongside Global Atlantic and its subsidiaries.

The use-case for Ivy, of investing into life and annuity reinsurance transactions alongside its sponsor, is very similar to the also sidecar like Athene Co-Invest Reinsurance Affiliate (ACRA) that was launched by Apollo’s Athene Life Re to augment its capacity for large life related reinsurance deals.

Global Atlantic and Ivy will invest alongside each other in new qualifying reinsurance opportunities sourced by Global Atlantic’s reinsurance business, the company said.

These could include transactions focused on the reinsurance of life & annuity blocks, as well as reinsurance of pension risk transfer (PRT) transactions.

“The Ivy co-investment vehicle provides Global Atlantic with access to up to approximately $1 billion of additional capital for new transactions,” explained Manu Sareen, Head of Global Atlantic’s Institutional business and Chief Executive Officer of Global Atlantic Re Limited.

“This co-investment vehicle provides Global Atlantic with significant flexibility to better serve our reinsurance clients and gives our co-investors an opportunity to earn compelling risk-adjusted returns by deploying capital in this attractive market,” Sareen added.

Transactions will continue to be underwritten using Commonwealth Annuity and Life Insurance Company, Global Atlantic’s flagship reinsurance entity.

Any business ceded to Ivy will be managed by Global Atlantic, using its risk and investment management capabilities.

Ivy looks set to operate in a similar manner to a kind of ILS fund or sidecar for Global Atlantic, offering investors an opportunity to access insurance-linked returns from the firms reinsurance deal-flow.

Global Atlantic will benefit by bringing efficient capital from institutional markets into its underwriting using Ivy, which will augment its own capacity and ability to take on increasingly large deals.

“Since Global Atlantic’s founding, we have reinsured approximately $30 billion of reserves spanning life & retirement blocks and PRT reinsurance,” Sareen said. “We look forward to continuing to partner with insurers by providing customized solutions to meet the unique financial, risk and capital objectives of each of our clients.”

As a co-investment vehicle there will be a strong alignment between Global Atlantic and investors in the Ivy Co-Investment Vehicle LLC.

As life, annuity and pension risk transfer deal sizes balloon, companies are finding it attractive to bring investor capital into deals alongside them, resulting in these launches of vehicles that operate akin to reinsurance sidecars.

For the investors they are an attractive way to access life reinsurance linked returns, while for the sponsor they support ability to transact and will also earn them an attractive new source of fee income as well.