TPG and Jackson Financial Partner for Strategic Management in Insurance

Industry Update: TPG and Jackson Financial Forge Strategic Management Partnership

Private equity firm TPG Inc has solidified an investment management agreement with Jackson Financial, targeting up to $20 billion in oversight for Jackson's retirement services sector. This strategic collaboration will initially involve TPG managing a minimum of $12 billion in assets under management (AUM), with structured incentives aiming to eventually reach the $20 billion target. The focus will center on investment-grade asset-based credit and direct lending solutions.

TPG will also invest $500 million into Jackson, acquiring an approximate 6.5% stake in the company. In addition to this investment, Jackson will receive $150 million in TPG shares, with potential for additional shares as incentives for reaching the $20 billion AUM goal. This alliance reflects a broader industry trend where alternative asset managers, like TPG, pursue diversified capital strategies due to limits faced by traditional investors on private asset allocations.

Jackson plans to leverage the $150 million capital infusion by funding its newly formed captive reinsurer, Hickory Brooke Reinsurance Company, in Michigan. This entity aims to expand sales of Jackson's fixed and fixed index annuity products efficiently. Skadden, Arps, Slate, Meagher & Flom LLP provided regulatory and compliance advisory services for Jackson during the transaction, while TPG received counsel from Debevoise & Plimpton LLP, along with actuarial insights from Oliver Wyman.

In a reflective statement, TPG's CEO, Jon Winkelried, emphasized, "This strategic partnership is an important step in the evolution of our franchise and insurance practice, creating opportunities for us to extend the duration of our capital while scaling our product capabilities."