Equitable Boosts AllianceBernstein Stake with Reinsurance Deal Funds

Equitable Holdings, Inc. (NYSE: EQH) has announced plans to use funds from a recent reinsurance deal to increase its stake in AllianceBernstein (AB), a leading global investment management firm. The transaction, which involves the reinsurance of a significant portion of Equitable's variable annuity liabilities, will generate approximately $1.2 billion of value on a Statutory basis. This includes an expected $800 million capital release, a positive ceding commission and consideration for the acquisition of Corporate Solutions Life Re totaling approximately $300 million subject to adjustment, and approximately $100 million in tax benefits.

The reinsurance agreement with Venerable Holdings, Inc. (Venerable) will significantly de-risk Equitable's balance sheet, reducing its required capital by 64% and increasing its Risk-Based Capital (RBC) ratio by approximately 60 points. The transaction will also unlock statutory capital of approximately $1.2 billion, consistent with the Company's economic valuation. Equitable will continue to administer the reinsured policies, ensuring a seamless client service experience and maintaining control over the policyholder relationship.



Equitable's decision to increase its stake in AllianceBernstein aligns with its long-term business objectives, including expanding its investment management capabilities, growing its asset under management, and enhancing its distribution network. By investing in AB, Equitable gains access to a broader range of investment management services and products, diversifying its revenue streams and mitigating risks associated with relying solely on traditional insurance products.

AllianceBernstein's extensive distribution network and client base also provide Equitable with an opportunity to expand its reach and tap into new markets. This increased distribution capability helps Equitable to grow its customer base and generate more revenue. Additionally, the integration of AllianceBernstein's operations with Equitable's existing business can achieve synergies and cost savings, leading to improved operational efficiency and reduced expenses.



Equitable's strategic move to boost its stake in AllianceBernstein is expected to generate attractive returns on capital, as mentioned by Leslie Barbi, Executive Vice President, Chief Investment Officer, RGA. The investment in Ruby Reinsurance Company (Ruby Re), a reinsurance sidecar vehicle sponsored by RGA and focused on the U.S. asset-intensive market, represents a significant milestone in AB's continued goal of leadership within insurance asset management.

In conclusion, Equitable's use of funds from the reinsurance deal to boost its stake in AllianceBernstein is a strategic move that aligns with its long-term business objectives. The transaction de-risks Equitable's balance sheet, reduces required capital, and increases its RBC ratio. By investing in AB, Equitable gains access to diversified revenue streams, enhanced distribution capabilities, synergies and cost savings, talent attraction and retention, and alignment with its long-term business objectives. This strategic move positions Equitable to better compete in the evolving financial services landscape.