MidCap did not disclose the value of the deal or the Apollo entity involved. People familiar with the matter however said that Apollo’s life insurance arm Athene Holding Ltd would end up being a major investor in MidCap because of the match between Athene’s liabilities and MidCap’s assets.
Athene last month completed its acquisition of the U.S. life and annuities business of Aviva Plc in a $2.6 billion deal after agreeing to enhanced safeguards for policyholders in a concession to New York’s superintendent of financial services Benjamin Lawsky.
That merger boosted Apollo’s assets under management from $112.7 billion to $157 billion. The people, who were not allowed to disclose details publicly, said the MidCap deal was delayed as a result of the prolonged regulatory review of the transaction with Aviva. An Apollo spokesman declined to comment.
Apollo gets paid lucrative fees for providing asset allocation services to Athene and for directly managing a portion of Athene’s assets across its investment platform, primarily in its credit business.
“We believe MidCap’s leadership position, best-in-class team, proven credit track record, and healthcare expertise will provide substantial opportunities to Apollo affiliates and other accounts managed by Apollo’s credit platform through direct access to loan originations in the healthcare sector,” Apollo senior managing director Marc Rowan said in a statement.
Bethesda, Maryland-based MidCap was founded in 2008 with a $500 million equity commitment from Lee Equity Partners LLC, Genstar Capital LLC and Moelis Capital Partners and a credit facility from Wells Fargo & Company.
MidCap said it would continue to provide capital to all sectors of the healthcare middle market and would also expand its access to capital and product offerings through its partnership with Apollo.
Bank of America Merrill Lynch, SunTrust Robinson Humphrey Inc and Moelis & Company acted as financial advisers and Greenberg Traurig LLP acted as a legal adviser to MidCap.
Greg Roumeliotis and Jessica Toonkel are reporters for Reuters News in New York