Canada Pension Plan Board to Buy Wilton Re for $1.8 Billion

March 21, 2014

The Canada Pension Plan Investment Board (CPPIB) announced that it has agreed to buy U.S. life insurance and reinsurance provider Wilton Re Holdings Ltd for $1.8 billion from a group of private equity firms, the first foray by the global dealmaker into the U.S. insurance business.

CPPIB said on Friday it would acquire Wilton Re, a leading purchaser of closed blocks of life insurance policies, from a group of private equity firms led by Stone Point Capital, Kelso & Co, Vestar Capital Partners and FFL.

“In making a long-term investment in Wilton Re, CPPIB views the company as an ideal platform through which CPPIB can deploy significant follow-on capital at scale in the U.S. life insurance sector,” CPPIB Senior VP of Private Investments André Bourbonnais said in a statement.

“Closed-block life insurance is an asset class with attractive risk-adjusted returns, well-suited to our long-term horizon,” he said, noting that CPPIB plans to invest further in the business for many years to come.

Wilton Re has invested more than $1.7 billion in strategic in-force reinsurance and mergers and acquisitions since its inception in 2005, and its chief executive, Chris Stroup, said CPPIB’s deep pockets will allow it to continue to grow.

“Under CPPIB ownership, we anticipate the capital resources necessary to accelerate growth and expand our core In Force Solutions and middle market insurance, and enhance our competitiveness overall,” Stroup said in a statement.

CPPIB, which manages Canada’s national pension fund, has net assets of C$201.5 billion, making it one of the biggest pension funds in the world.

(Reporting by Allison Martell and Andrea Hopkins; Editing by Jeffrey Benkoe and Steve Orlofsky)

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