Brighthouse Financial surges 14% as Aquarian nears takeover funding

Brighthouse Financial shares surged 14% after reports emerged that Aquarian Holdings, a New York-based private capital group, is advancing plans to acquire the US life insurer.

The Financial Times reported that Aquarian is in late-stage discussions with two large Middle Eastern investors to secure the necessary equity financing for the deal.

Advanced talks with Middle Eastern investors

FT reported, citing people familiar with the matter, that Aquarian is in advanced talks with Mubadala Capital and the Qatar Investment Authority (QIA), among other investors, to raise over $3 billion in equity.

This funding would support a takeover of Brighthouse at a significant premium to its current market price.

Aquarian has been pursuing a deal for months, already securing committed debt financing led by Royal Bank of Canada, Nomura, and Société Générale. However, equity financing has taken longer to arrange due to a detailed diligence process.

The group is now preparing to submit a final offer for Brighthouse as early as this week.

The transaction, if completed, would represent one of the largest insurance acquisitions in recent years, positioning Aquarian as a significant player in the sector.

Brighthouse’s market position and struggles

Brighthouse Financial, which was spun off from MetLife in 2017, is one of the last remaining large independent US life insurers.

It manages nearly $120 billion in assets but has faced challenges in improving profitability and achieving its targeted capital ratios.

The company’s reliance on variable annuities — a complex and capital-intensive product — has weighed heavily on its financial results.

These products are costly to hedge and carry high regulatory charges, contributing to earnings volatility and quarterly losses from accounting swings.

Despite launching a sale process earlier this year with Goldman Sachs and Wells Fargo, Brighthouse attracted limited interest from potential buyers.

Major private capital groups, including Blackstone, Apollo, and Carlyle, considered bids but ultimately dropped out after conducting due diligence, leaving Aquarian as one of the few active suitors.

Currently, Brighthouse has a market capitalization of about $2.5 billion.

A takeover at a significant premium would mark a major strategic shift for both the insurer and its potential buyer.

Aquarian’s expansion strategy

Founded in 2017 by Rudy Sahay, a former Guggenheim Partners executive, Aquarian has built its reputation by aligning insurance assets with private investments such as securitized debt, leveraged loans, and real estate.

The group manages more than $25 billion in insurance-related assets and earlier this year launched Aquarian Insurance Holdings to oversee its reinsurance and retail insurance businesses.

Aquarian already manages assets for niche life and annuity insurers, including Hudson Life, Somerset Reinsurance, and Investors Heritage.

An acquisition of Brighthouse would exponentially expand its asset base and push it into the ranks of the largest private capital groups in the industry.

The group is already backed by Mubadala Capital, which participated in a $1.5 billion fundraising round last year aimed at private credit, insurance, and real estate investments.