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Apollo-backed Athene expands mortgage bond wager ahead of IPO

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(Bloomberg) — Athene Holding Ltd., the annuity provider with ties to Apollo Global Management LLC, is building its investment portfolio with bonds tied to home loans as the company prepares for an initial public offering.

“Looking ahead, we continue to see opportunities in different segments of the residential mortgage-backed securities market,” Athene Chief Executive Officer Jim Belardi said Tuesday on a conference call. “In the last six months, we’ve been opportunistically purchasing these assets at yields and risk-return profiles that are very attractive.”

Holdings of RMBS in the available-for-sale portfolio climbed to $8 billion as of Dec. 31 from $6.22 billion a year earlier, the company said in a regulatory filing Monday. The securities account for about 16.5 percent of the portfolio, up from 13.8 percent at the end of 2014. The largest allocation is to corporate debt.

Athene on Monday filed for an IPO after propelling growth through acquisitions, including the purchase of an insurer in Germany last year. Belardi’s company, which previously targeted last year for an IPO filing, delayed that plan while working to fix accounting flaws. Athene also brought on industry veterans including Bill Wheeler, formerly head of the Americas at MetLife Inc., and ex-Genworth Financial Inc. Chief Financial Officer Marty Klein.

Retirement Products

Apollo helped start the Bermuda-based life insurer in 2009, and it has since expanded in retirement products, growing in the U.S. and other markets. Athene contributed $139 million to the private-equity firm’s pretax earnings last year. Apollo also has an indirect subsidiary that helps buy and renovate single-family homes.

AP Alternative Assets LP, a publicly traded investment vehicle managed by Apollo, is Athene’s largest shareholder. Athene plans to sell Class A common stock in the offering and will apply to list its shares on the New York Stock Exchange under the symbol ATH.

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