Nationwide has agreed to purchase Jefferson National, an insurance and registered investment advisory shop, from Napier Park Financial Partners for an undisclosed amount. The deal, which is expected to close in early 2017, expands the buyer’s financial services to a network of more than 4,000 registered investment advisors.
Jefferson is a fee-based retirement and financial investment advisory firm based in Louisville, Kentucky. The buyer services defined contribution retirement plans and also designs Monument Advisor, the company’s first flat-fee investment only variable annuity product. As part of the deal, Jefferson will become a subsidiary of Columbus, Ohio-based Nationwide.
“Combining forces with Jefferson National will accelerate Nationwide's ability to establish a credible foothold in the fee-based market rather than trying to build this capability on our own,” states Nationwide COO Kirt Walker. The deal by insurance giant Nationwide comes after the Department of Labor finalized the Obama Administration-led fiduciary rule in early 2016. The rule, which is set take effect beginning April 2017, requires retirement plan advisors to put their client’s best interests before their own. The rule is intended to help prevent advisors from taking advantage of potential retirees by giving bad financial advice.
Napier Park, the private equity arm of institutional investment management firm Napier Park Global Capital LP, bought out Jefferson from its prior management in December 2011. Since the buyout, Jefferson has doubled the adviser network and has also grown the company’s investment only variable annuity assets under management by more than four times over. Napier Park targets investments of $5 million and $30 million in technology-enabled companies. This deal marks as the fourth sale, IPO or merger of the Napier Park’s Fund I companies.
Recent insurance deals include Canada Pension Plan Investment Board’s agreeing to purchase Ascot Underwriting Holdings Ltd. and American International Group Inc.’s (NYSE: AIG) selling mortgage insurer United Guaranty Corp. for nearly $3.4 billion to Arch Capital Group Ltd. (Nasdaq: ACGL).
Deloitte Corporate Finance LLC is serving as financial adviser to Nationwide and Sutherland Asbill & Brennan LLP is acting as legal counsel. Raymond James & Associates is serving as financial adviser to Jefferson, and Sidley Austin LLP is acting as legal adviser.