If you’ve been keeping an eye on the retirement company and fixed annuity service provider Athene Holding Ltd (NYSE:ATH), you’ll presumably know that its initial public offering went quite well. A total of 27 million class A shares from the retirement services company raised $1.1 billion in a year marked by slow and unremarkable IPOs.
Athene became available for the first time on the New York Stock Exchange this Friday under the ticker symbol, “ATH”. The offering was at the midpoint of its expected range of $38 and $42 per share, according to Reuters.
Athene reported selling the shares at $40 each; they opened at $43.56 on the market and reached a high of $44.62, a promising result for potential investors looking to dip their toes into Athene.
It was the year’s largest IPO of a financial company. It was also the third-largest IPO of 2016 according to the Wall Street Journal. Business Insider said US Foods Holding Corp (NYSE:USFD). collected 1.2 billion, making it the second-largest, while ZTO Express (Cayman) Inc (NYSE:ZTO) raised $1.4 billion, for the largest IPO of the year.
Athene currently has 186 million shares outstanding, and is valued at an estimated $7.5 billion according to Business Insider.
According to Reuters, Athene is backed by Apollo Global Management LLC, a private equity firm founded in 1990, which retains a 45 percent voting control over Athene. Apollo helps manage Athene and founded the company.
Athene was formed in 2009 after the recession to purchase assets from insurers in need of funds. The company is now valued at $7.55 billion.
The company will get none of the proceeds from the IPO; all the shares are being sold by particular shareholders, which means the IPO itself has offered no immediate cash up for Athene to use.
However, the timing of the IPO release may allow Athene to catch the tail end of the post-Trump election market rally, which means investors looking to jump in need to do it quick or decide to wait for another drop. Early investors already earned as much as 9 percent returns, according to Financial Times.
On the other hand, the pension provider is planning on major expansions following its wildly successful IPO, which means a drop may not be anywhere in sight for Athene’s market price.
Chief executive James Belardi said the company has $2.5 billion of capital available for expansion projects according to Financial Times, which means it’s well-positioned to take off rapidly. The company is now considering expanding its product line to include products such as privacy guide for risk-transfer deals. And compared to fellow life insurance companies, Athene may be a good bet, performing better than the S&P 500 life and health insurance index according to Financial Times.
Athene has a history of good performance since at least 2012, according to The Motley Fool. The company has used strategic acquisitions to expand into international markets, including the UK and Germany, but still has much room to expand and grow and time for investors to jump on board.
In total, 22 companies advised on the opening. The offering was underwritten by Goldman, Sachs & Co., Barclays (LON:BARC), Citigroup (NYSE:C) and Wells Fargo (NYSE:WFC) Securities. In addition, BofA Merrill Lynch, BMO Capital Markets, Credit Suisse (SIX:CSGN), Deutsche Bank (DE:DBKGn) Securities, J.P. Morgan, Morgan Stanley (NYSE:MS), RBC Capital Markets, BNP PARIBAS, BTIG, Evercore ISI, SunTrust Robinson Humphrey and UBS Investment Bank are serving as bookrunners. In addition to the underwriters and bookrunners, Dowling & Partners Securities LLC, Keefe, Bruyette & Woods, A Stifel Company, Lazard, Rothschild, Sandler O’Neill + Partners, L.P. and The Williams Capital Group, L.P. are serving as co-managers on the offering, according to Street Insider.