A consortium backed by Fortress Investment Group and BlackRock is among suitors considering bids for German life insurance consolidator Viridium Group, people with knowledge of the matter said.
Blackstone, Deutsche Bank's asset management arm DWS Group and Partners Group have also been studying Viridium, which could be valued at about €3 billion ($3.2 billion) in a deal. It’s also attracting early interest from insurers including Assicurazioni Generali, which already owns a minority stake, as well as Apollo Global Management’s Athora affiliate and investment firm Sixth Street, the people said.
Viridium’s main owner Cinven asked for initial expressions of interest to be submitted last week, with company management set to hold initial meetings with suitors in the coming weeks, according to the people.
The asset management industry is going through a shake-up. In private markets, the industry is consolidating with a flurry of smaller firms looking for partners. At the same time, traditional asset managers are seeking scale and new offerings as they grapple with increasing costs.
Any transaction would add to the $139 billion of German deals announced this year, according to data compiled by Bloomberg. Viridium is one of the largest asset managers and consolidators of so-called back books, or portfolios of legacy insurance policies which it manages until maturity.
The Viridium sale is at an early stage, and some bidders could end up teaming up later, the people said. Deliberations are ongoing, and there’s no certainty who will decide to proceed further in the process. A spokesperson for Fortress, which is backed by Mubadala Capital, declined to comment. Representatives for Athora, BlackRock, Blackstone, DWS, Cinven, Generali, Partners Group, Sixth Street and Viridium also declined to comment.
Based in a small city near Germany’s financial capital of Frankfurt, Viridium has about €67 billion of assets under management. The company was founded by Cinven and Hannover Re as Heidelberger Leben Group in 2014 and was renamed two years later.
BlackRock, which reported a record $11.5 trillion in assets under management earlier this month, has been expanding its presence in private markets in recent years by acquiring firms like private equity firm Global Infrastructure Partners and data provider Preqin. It’s also been holding talks to acquire private credit firm HPS, Bloomberg News has reported. BlackRock is likely to be a minority investor in the Fortress consortium with a stake of less than 10%, some of the people said.
Italian insurance consolidator Eurovita, which is also backed by Cinven, last year went into administration after it fell short on solvency requirements when bond-market volatility hit portfolios and clients were seeking to pull money. After that episode, regulators have started more closely scrutinizing private equity ownership of businesses like Viridium.
