Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
KKR is exploring entry into the UK and European pension risk transfer markets, as competition heats up between the world’s biggest private capital groups to seize ground in the European insurance sector.
The US firm, which manages more than $700bn in assets, has held talks with insurance companies across the continent to expand the reach of its own insurer Global Atlantic, according to people familiar with the matter.
KKR is exploring potential partnerships under which it and an insurer would deploy capital into investments sourced by KKR, one of the people said.
The New York group was not exploring buying a European insurer outright, that person said, in an approach that would differ from competitors. But the tie-ups could involve KKR investing from its own balance sheet in the partner to help it grow, the person added.
Any move by KKR would mark the latest foray by US private capital into the European retirement markets, where long-dated liabilities give firms access to capital to deploy into credit or other yield-generating deals.
One insurance executive said KKR had been holding talks in recent months with some of the UK’s largest insurers, apparently with “big” ambitions for the market. They said KKR would look to build up its presence over time.
The executive said KKR had held talks with them and the largest players in the UK life insurance market, including over a partnership.
KKR declined to invest in a pension risk transfer business that is being set up by UK insurer Standard Life, set to receive backing from CVC, partly because the entity was too small, according to a person familiar with the matter.
However, the private capital group could seek to enter the market using a similar joint venture, according to another person familiar with KKR’s thinking.
Another executive said “KKR has looked at everyone” in the UK in the pension risk transfer market, and that it could seek to set up an external partnership with an insurer similar to the one L&G had struck with Blackstone.
“KKR needs to decide if they are one thing or the other. At the moment they look like they want to go the partnership route,” the executive said.
KKR bought a majority stake in US insurer Global Atlantic in 2021 and later took full ownership. The company is not seen as a major player in Europe, unlike competitor Apollo Global Management’s minority-owned insurer Athora, which struck a landmark deal in UK pension risk transfer last year.
KKR has, however, deployed Global Atlantic capital into some notable European investments, such as a complex deal earlier this year to lend €1.4bn to Global Sports Group, created by private equity group CVC to house its holdings in football and other leagues.
Partnership deals would save KKR from the full regulatory burden of owning a European insurance company and would allow it to focus on sourcing deals, one of the people said.
Athora doubled in size after its £5.7bn purchase last year of UK retirement savings group Pension Insurance Corporation, which had £50bn in assets.
Brookfield’s insurance arm also announced a £2.4bn acquisition last year of Just Group, another group specialising in pension risk transfers, or buyouts of pension policies.
KKR declined to comment.
