Wall Street Puts Retirement at Risk

Apollo and other firms spice up the portfolios of annuity providers
Getty Images

Until April 2011, Patrick “Pete” Dodd, a former money manager at Liberty Life Insurance in Greenville, S.C., invested customer premiums in what he calls a “squeaky clean” portfolio: bonds backed by state governments and blue chip corporations. Then Athene Holding, a company funded by private equity firm Apollo Global Management, acquired Liberty and changed its investment strategy. Now the unit’s holdings include securities backed by subprime mortgages, time-share vacation homes, and a railroad in Kazakhstan. “When you look at the business model these guys use, where they’re substantially increasing the risk in the bond portfolio, sooner or later, in my opinion, that has to come home to roost,” says Dodd, who helped manage $4 billion before the sale to Athene.

To continue reading this article you must be a Bloomberg Professional Service Subscriber.