American Equity Investment Life Holding Co, a leading issuer of annuities based in West Des Moines, and Adams Street Partners, a global leader in private markets investments, announced they have reached an agreement to form a joint venture for co-developing insurer capital-efficient products in middle market credit, with American Equity initially committing up to $2 billion to the investment strategy.

Under the terms of the agreement, American Equity and Adams Street will form a new management company that intends to sponsor and manage investment vehicles established primarily to invest in secured loans to U.S. middle market private companies backed by private equity sponsors.

Based in Chicago with offices worldwide, Adams Street has deep experience in private markets. The firm currently manages $44 billion of assets across primary, secondary, growth equity, credit and co-investment strategies, the companies said in a joint news release. In private credit, Adams Street pursues debt investment opportunities in middle market companies across the entire capital structure.

“We are pleased to announce our intent to partner with Adams Street as part of diversifying our investing activity in secured, first lien middle market credit and build a new business to bring this asset class to other insurers,” said Anant Bhalla, CEO of American Equity. “We expect this partnership model to be the blueprint for AEL’s execution of our 2.0 business model investment pillar with best in class asset managers in private credit and real assets.”  

The partnership is intended to be operational in the first half of this year, the companies said.

“The partnership between Adams Street and American Equity is an exciting development for our private credit business,” said Jeff Diehl, managing partner and head of investments at Adams Street. “American Equity has exactly what we look for in a partner — a great culture, high-integrity people, and a focus on generating returns for investors.”

Business Record Insider: In this recent article, CEO Anant Bhalla outlines American Equity’s growth strategy.