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CVC has agreed a partnership with American International Group worth up to $3.5bn as the push by private markets firms into investing insurance assets gathers pace.
The two groups announced on Monday that AIG would contribute up to $2bn to funds and separately managed accounts, or bespoke vehicles, managed by Amsterdam-listed CVC.
The US insurer would also provide up to $1.5bn in investment for the launch of a new CVC fund targeted at wealthy individuals, the groups said.
The announcement marks the latest tie-up between private markets and insurance companies, as listed alternative asset managers seek to gather assets to pump into investments across private equity, private credit, infrastructure and real estate.
The deal will mean CVC, which manages about €200bn in assets, deploying the insurer’s capital into diversified private and liquid credit investments.
With AIG as a seed investor, Jersey-based CVC will also launch its latest so-called evergreen fund aimed at wealthy individuals, focused on buying and selling ageing private equity assets on the second-hand market.
Evergreen funds have no end date and usually allow regular deposits and withdrawals, unlike the traditional closed-end funds that private capital firms have managed for pension plans and other institutions for decades.
Large private capital groups including Blackstone, Apollo, KKR and CVC have launched dozens of evergreen funds in recent years as the money available to the sector from institutions has slowed. Listed groups also aim to consistently increase their assets under management to provide public shareholders with reliable fee revenue.
The CVC-AIG deal follows a string of other partnerships between private capital firms and insurers.
AIG, which is trying to re-risk its insurance portfolio after underperforming rivals since 2018, has also increased its allocations to private markets through a multiyear partnership with alternative assets giant Blackstone.
Blackstone has a long-term asset management agreement with Corebridge, the life insurer and retirement solutions provider spun out of AIG in 2022, and has separately struck multiple reinsurance agreements with AIG. Under those deals, funds managed by Blackstone have agreed to cover some of AIG’s insurance exposures for a premium.
AIG’s Peter Zaffino, who earlier this month announced plans to step down as chief executive, last year signalled to investors that the group intended to shift more of its investments into alternative strategies. The insurer received a $185bn US taxpayer bailout after its risky bets in the credit default swaps market meant it almost collapsed in 2008.
CVC has been focusing on developing its relationships with insurers as US firms such as Apollo target the sector. While Apollo owns an insurer from which it can deploy capital, CVC has been focusing on serving insurance companies as clients.