Brookfield Wealth Solutions is gearing up to offload a massive private credit portfolio valued at approximately $1.5 billion from American National, the insurance company it acquired in 2022. This move highlights a growing trend in the financial market, where firms are increasingly turning to secondary markets to manage their substantial investments.
According to insider sources, Brookfield has enlisted Jefferies Financial Group to help find buyers for these so-called limited partner stakes. The portfolio primarily consists of around $1.2 billion in private credit, which breaks down to roughly $1 billion in senior loans and $200 million in lower-tier, opportunistic credit.
As the market for secondhand fund stakes gains traction, it provides a strategic avenue for companies to shed large positions. For instance, the Florida State Board of Administration is also exploring the secondary market, seeking bids for a collection of private credit stakes worth up to $4 billion.
Interestingly, assets sold on the secondary market often go for discounted prices. Experts suggest that the opportunistic credit portfolio from American National might attract bids around 90 cents on the dollar, while the senior-ranking debt could command even higher offers.
Brookfield Wealth Solutions, formerly known as Brookfield Reinsurance, completed the acquisition of American National in a deal valued at approximately $5.1 billion. Now, firms like Coller Capital, Ares Management Corp., Pantheon Ventures, and Tikehau Capital are among those ready to snap up credit fund stakes in this growing secondary market.
In a world where financial strategies are constantly evolving, Brookfield’s decision to divest this portfolio is a clear indication of how firms are adapting to new market realities. Keep an eye on this space—there could be more significant moves coming soon!
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