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Allianz Grows Wealth Bet With Stake in $68 Billion Money Manager AlTi *Centurion Insurance AFS*

Feb 23, 2024 (0) comment , , , , , , , , , , ,

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Allianz SE is making a strategic investment in money manager AlTi Global Inc. in an expansion of the insurance giant’s global holdings in wealth management.

The German insurer’s venture arm, together with alternative asset management platform Constellation Wealth Capital, will invest as much as $450 million in the wealth and asset manager, which oversees total assets of about $68 billion. AlTi will use the capital to help finance future mergers and acquisitions as well as other growth initiatives, according to a statement Thursday from the New York-based firm.

Allianz X Chief Executive Officer Nazim Cetin and another representative of the insurer will join AlTi’s board of directors when the deal closes, while CWC will have an observer seat, according to the statement.

“Our investment in AlTi demonstrates our approach as well as our conviction in wealth management and alternatives,” Cetin said. “We believe it will unlock opportunities.”

Allianz, one of the world’s largest financial services companies with €2.16 trillion ($2.33 trillion) in assets under management, joins a growing number of global firms building their focus on the wealth sector. Carlyle Group Inc. bought a stake in September in US wealth adviser Captrust, while Canadian fund Ontario Teachers’ Pension Plan invested in London-based 7IM during the same month.

Allianz X is already an investor in robo-adviser Wealthsimple and its peer Purpose Unlimited, while Allianz also owns a large stake in UK digital wealth manager Money Farm after repeatedly investing in the company since 2016. It has used Money Farm to offer some of its actively managed funds directly to retail investors, without them having to go through a bank or a broker.

AlTi grew out of a merger last year between wealth managers Alvarium Investments and Tiedemann Group through a blank-check firm. Both companies previously boosted their growth through M&A activity and joint ventures, striking deals with rival firms over the past decade spanning French asset manager Iskander and Swiss wealth manager Constantia Partners.

As part of the AlTi deal, which is subject to regulatory and shareholder approval, Allianz X is investing $250 million by acquiring a mix of common and convertible preferred stock, with an option to allocate a further $50 million for the wealth firm’s global expansion plans, the statement said.

CWC, meantime, is allocating $150 million to acquire a new form of convertible preferred stock in AlTi, with most of that investment due to close by the end of March.

AlTi’s stock has dropped 44% since it began trading in January 2023. It most recently reported revenue of $49.2 million for the quarter ended Sept. 30, down 5% from the prior three-month period. AlTi Chief Executive Officer Mike Tiedemann said he expects the company’s finances to improve this year.

“2023 was the year of integration and establishing best practices,” he said in a Zoom interview Thursday. “That was the year of internal focus – and now it’s going to invert.”

Photograph: Flags with the Allianz logo fly in front of the Olympic Tower in Munich, Germany. Photo credit: Guido Krzikowski/Bloomberg

Copyright 2024 Bloomberg.

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