Apollo-Backed Athene Sees 2016 Accounting Fix After IPO Delayed

  • Plan is to improve to significant deficiency status, CFO says
  • Athene is working to fix accounting ahead of planned IPO

Athene Holding Ltd., the insurer with ties to Apollo Global Management LLC, said it expects to remediate a flaw in its accounting by early next year as management plans for an initial public offering.

“A tremendous amount of work has been completed on the actuarial material weakness, and testing is under way” to address the shortcomings, Chief Financial Officer Martin Klein said Thursday in a presentation discussing quarterly results. “We plan to be able to downgrade this to a significant deficiency early in ’16, after the completion of testing.”

Chief Executive Officer Jim Belardi is working to improve financial reporting after postponing an IPO that was initially targeted for this year. He now plans to file a prospectus by June 30, with help from Klein, who was hired in October from Genworth Financial Inc.

Athene in February withdrew some financial results after finding a material weakness in its accounting for reserves and taxes tied to a 2013 purchase of a U.S. life and annuity business from Aviva Plc. Belardi has worked to build the insurer through acquisitions, including the purchase of a U.S. unit from Royal Bank of Canada and German subsidiaries of Delta Lloyd NV.

Third-quarter net income declined 79 percent to $23 million, the company said Thursday in a presentation. The Standard & Poor’s 500 Index tumbled 6.9 percent during that period, hurting results tied to annuities. AP Alternative Assets LP, a publicly traded investment vehicle managed by Apollo, is Athene’s largest shareholder.

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