Atlas Merchant Capital, the private equity firm founded by ex-Barclays chief executive Bob Diamond, has grabbed its largest deal to date.
The firm, along with Cornell Capital, TRB Advisors, Global Atlantic, Pine Brook and J Safra, has agreed to buy annuity business Talcott Resolution for $2.05bn (£1.52bn).
US insurance company The Hartford, which sold Talcott, said the deal will “complete our exit from the run-off life and annuity businesses and strengthen our focus on growing our market-leading property and casualty, group benefits and mutual funds businesses”.
Talcott was created in the aftermath of the financial crisis, to reduce The Hartford's exposure to variable annuities – tax-efficient retirement savings products which invest the savers' money in equity investments.
It was designed to be a run-off group, allowing The Hartford to manage existing annuities until maturity without writing new policies, as variable annuity products proved to cause problems for insurers in the financial crisis.
Private equity firms such as the Atlas consortium may buy these run-off portfolios in the hope that they can squeeze a larger return from them by cutting down on costs.