Aflac Global Investments agreed to buy a "significant" noncontrolling minority interest in direct lending asset manager Varagon Capital Partners LP.
Upon closing of the transaction, Aflac Global Investments will make a new multiyear investment commitment of up to $3.0 billion to Varagon to invest in middle market loans. Aflac Global Investments will acquire the interests in Varagon held by certain former and current partners and affiliates of Oak Hill Capital Management.
The transaction will not reduce ownership of Varagon by management or American International Group Inc., and upon closing, Aflac Global Investments and AIG will hold equal ownership stakes.
Varagon will continue to operate as an independent company with no changes to its strategy, investment philosophy, management team or day-to-day operations, according to a statement. The target has made over $14.5 billion of financing commitments as of Dec. 31, 2019.
The transaction does not have a material impact on parent company Aflac Inc.'s 2020 capital deployment plans or overall capital and liquidity position. The deal is expected to close in the first quarter of 2020, subject to customary regulatory and other closing terms.
Rothschild & Co. served as financial adviser, and Debevoise & Plimpton LLP as legal adviser, to Aflac Global Investments. Wells Fargo Securities served as financial adviser and Davis Polk & Wardwell LLP served as legal adviser to Varagon. Cadwalader Wickersham & Taft LLP provided legal representation to AIG.