Abu Dhabi Investment Authority, Abu Dhabi's wholly owned subsidiary, agreed to acquire up to 21.4% of Pension Insurance Corp. Group.
The sovereign wealth fund's private equity department will acquire the stake from funds manage by J.C. Flowers & Co.
The deal is subject to regulatory approvals. A spokesman for ADIA said financial terms were not disclosed.
Pension Insurance Corp. Group is the parent company of specialist insurer and provider of bulk annuities Pension Insurance Corp.
The deal is the latest principal investment by ADIA's private equity department, which targets financial services, health care, industrials, technology and consumer products.
ADIA does not disclose its assets, but the Sovereign Wealth Fund Institute estimates it has $828 billion. ADIA's 2017 financial review showed the minimum target allocation to private equity is 2%, with a maximum of 8%.
"This investment is a further demonstration of our ongoing strategy to seek out principal investments in market-leading businesses with strong management teams," said Hamad Shahwan Aldhaheri, executive director of the private equity department at ADIA, in a news release. "PIC has proven its ability to respond to the growing trend for U.K. companies to derisk their defined benefit pension obligations and, as such, has strengthened its position as one of the industry's leading pension insurance providers."
PIC has a "small group of committed shareholders with financial services expertise and long-term investment horizons," added Tracy Blackwell, CEO of PIC, also in the news release. "We are confident that, together, they will continue to build on the valuable support provided by J.C. Flowers over the past 12 years, and ensure that PIC is ideally placed to meet the increased demand from pension fund trustees."
Financial services private equity specialist firm J.C. Flowers was a founding investor in PIC.
ADIA was advised by Credit Suisse; Ernst & Young; Oliver Wyman; and Allen & Overy. J.C. Flowers was advised on the deal by Evercore; and Paul, Weiss, Rifkind, Wharton & Garrison.