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Apollo leading the charge for Aviva US insurance assets

15 Nov 2012

Private equity heavyweight Apollo Global Management has reportedly emerged as lead bidder for Aviva’s US life insurance and annuities arm.

Harbinger Capital Partners and Guggenheim Partners were also said to have bid for the asset, but now Guggenheim appears to have teamed up with Apollo for a bid, according to Reuters.

Aviva, Britain’s second-largest insurer, is attempting to sell or close more than a quarter of its operations as part of a dramatic overhaul of its structure aimed at winning over investors concerned with its weak share performance.

The three firms have been buying unwanted units from life insurers since 2009 to gain access to a stable source of funds for investment management operations.

The expected $1bn sale would represent a significant price cut on the £1.8bn ($2.8bn) Aviva paid for the unit in 2006.

Apollo has also begun fundraising for its latest buyout vehicle targeting $12bn, which would equal the largest private equity fund currently being raised.

The firm’s previous buyout vehicle – its seventh – raised $14.7bn in 2008. To date it has posted a 35 per cent gross IRR, while its $10bn 2006 predecessor is running a gross IRR of nine per cent, according to public disclosures.

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