Blue Owl Capital agreed to acquire Kuvare Insurance Services — which does business under the name Kuvare Asset Management — for $750 million.
Blue Owl will fund the acquisition through a combination of $325 million in cash and the issuance of $425 million in Blue Owl class A common shares, it said in an April 3 release.
The transaction also includes the potential for up to a $250 million earnout for Kuvare Asset Management, subject to certain adjustments and achievements of future revenue targets.
Kuvare Asset Management is a boutique investment management firm that provides asset management services to the insurance industry. The transaction is expected to close in the second or third quarter of 2024, subject to customary regulatory approvals and other closing conditions, and specified termination rights.
Upon the closing of the Kuvare Asset Management acquisition, Blue Owl will be allocated up to $20 billion of AUM, in aggregate.
The release also noted that most of Kuvare Asset Management’s employees are expected to join Blue Owl.
Separately, Blue Owl will also purchase $250 million of the preferred equity of Kuvare UK Holdings, a deal that will provide growth capital to Kuvare UK Holding's insurance companies, each of which will become new asset management clients of Blue Owl.
Kuvare UK Holdings is an affiliate of Kuvare Asset Management, a spokesperson for Blue Owl said.
"Our preferred equity investment in Kuvare (UK Holdings) reflects our confidence in the growth trajectory of the business; both through its extensive distribution network and proven reinsurance strategy,” said Marc Lipschultz, co-CEO of Blue Owl, in the release.
In addition to the preferred equity investment, Blue Owl and Kuvare UK Holdings have also entered into investment management agreements that will allow Blue Owl to deploy up to $3 billion of assets across its existing credit, GP strategic capital and real estate investment platforms. Kuvare UK Holdings will continue to manage the overall asset allocations for its insurance businesses and strategic investments.
Blue Owl had more than $165 billion in assets under management as of Dec. 31. Kuvare UK Holdings has $37 billion of assets. Blue Owl Capital is one of the largest private lenders in North America and was formed in 2021 after Owl Rock, founded by Lipschultz and Doug Ostrover, merged with Dyal Capital, founded by Michael Rees.
