Global Atlantic Buys Forethought for Post-Goldman Growth

Global Atlantic Financial Group, the insurer divested by Goldman Sachs Group Inc. this year, agreed to buy closely held Forethought Financial Group Inc. to expand sales of life and retirement products.

The purchase will increase assets at Global Atlantic to more than $31 billion, the Bermuda-based insurer said today in a statement that didn’t include terms. Forethought had $6.3 billion in assets as of Dec. 31, according to its website.

Global Atlantic, led by Chief Executive Officer Allan Levine, is expanding distribution after Goldman Sachs sold a majority stake in the firm to private investors. The insurer announced in May that it would buy Aviva Plc’s U.S. life business, with $10 billion of assets, in a reinsurance deal.

“Forethought’s leading annuity distribution and pre-need business will further diversify our product mix and position us to provide a full range of innovative life and annuity solutions,” Levine said in today’s statement. Pre-need policies provide funds that can pay funeral costs.

Global Atlantic was founded in 2004 at Goldman Sachs and acquired Commonwealth Annuity and Life Insurance Co. in 2005. The firm also offers reinsurance under the Ariel Re brand. Global Atlantic had $1.75 billion in equity, the company said in a May 1 statement announcing the separation from New York-based Goldman Sachs, which maintained a stake.

Forethought’s surplus, a measure of assets minus liabilities, was about $470 million as of Dec. 31. The Houston-based company agreed in 2012 to acquire an individual annuities distribution unit from Hartford Financial Services Group Inc., and entered the variable annuity market this year, according to Forethought’s website.

Caskets, Funerals

Hillenbrand Industries Inc., a maker of caskets, agreed to sell Forethought to Devlin Group LLC in 2004 for about $280 million, according to a statement at the time. Hillenbrand started Forethought to sell coverage that paid for funerals when policyholders died. Mark Kollar, a spokesman for Global Atlantic at Prosek Partners and David Entrekin at Forethought declined to comment on terms of the agreement.

Global Atlantic’s transaction is expected to be completed in early 2014, according to the statement. Debevoise & Plimpton LLP provided legal advice to Forethought, the law firm said in an e-mailed statement.

Goldman Sachs said capital requirements by international banking regulators pushed the retreat from insurance.

(Law firm corrects to say it represented Forethought in the eighth paragraph of story published Sept. 26.)
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