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American Equity Investment Life customers: What will happen to your retirement annuity nest egg once Brookfield is in charge?

Bermuda-incorporated Brookfield Reinsurance, an affiliate of Canadian private equity giant Brookfield Corporation, recently made a takeover offer for American Equity Life (AEL). If the deal is approved, Brookfield says its asset management arm   will manage “a significant portion of AEL’s assets,” with a “focus on alternative asset strategies” and “access to [Brookfield’s] leading direct origination platforms.”

Brookfield executives made similar statements about “redeploy(ing) into higher yielding strategies” and direct origination in 2022 when Brookfield Reinsurance acquired Texas-based American National Insurance Company.

What did “higher yielding strategies” and ”direct origination” mean for American National policyholders? Since the Brookfield Reinsurance takeover, American National has sold more than two billion dollars worth of some of its bonds and purchased billions of dollars in complex investments from other Brookfield affiliates, including private credit loans. Bloomberg has described private credit as “an inherently risky industry” with “little oversight.”

Hundreds of millions of dollars of the debt is related to Brookfield Property Partners, which Brookfield took private in 2021 after it took $2 billion in losses in 2020. Brookfield affiliates have defaulted on more than $1 billion of office real estate loans so far in 2023.

Wall Street Journal: “Brookfield’s Los Angeles Office Company Is Roiled by Defaults”

Forbes: “Real Estate Giant Brookfield Reportedly Defaults On Second Major Office Portfolio This Year—Here’s Why It Matters”

When you bought your annuity, did you think you were signing up for investments in an inherently risky industry or the “office real estate apocalypse”?

YOU HAVE A VOICE: Any acquisition of American Equity Life by Brookfield will need approval from Iowa regulators, including a public hearing. Follow Private Equity Retirement Watch to get a notification when the public hearing is announced.