Fidelity & Guaranty Life Insurance launches IPO
December 16, 2013 by Victor Epstein
Fidelity & Guaranty Life Insurance Company began its life Friday as a publicly traded company under the FGL ticker.
The Des Moines-based firm, which relocated its headquarters from Baltimore last month, priced an initial public offering of 9.75 million shares Thursday at $17 each. They began trading this morning on the New York Stock Exchange and were up $1.62 to $18.62 as of 1:03 p.m., before closing at $18.86 to post an 11 percent Day 1 gain.
The offering is valued at $165.8 million.
“It’s a pleasure to see Wall Street give us such a warm reception,” said Lee Launder, FGL’s chief executive officer. “We’re proud to take our company public today. We are committed to our core products, markets, distribution and policyholders.”
FGL is a mid-sized annuities and life insurance company. It has a temporary location in the Hub Tower and has signed a lease for permanent office space on the 14th floor of Two Ruan Center, at 601 Locust Street, according to corporate spokesman Paul Tyler. It will move into the new space Jan. 1 and hold a ribbon cutting ceremony Jan. 9.
Fidelity expects to employ 50 people locally within three years and has already hired three employees here. They’re led by former Aviva USA actuary Mike Spurbeck, who is now a Fidelity vice president.
FGL had 180 employees in November, with 150 of those in Baltimore and 30 in Lincoln, Neb.
“We’re hiring,” Tyler said Friday.
FGL reported $1.35 billion in revenue during the 12 months ended Sept. 30, earnings of $348 million, and total assets of $22.4 billion.
Fidelity & Guaranty’s ultimate parent company is the New York City-based Harbinger Capital Partners hedge fund, which is controlled by financier Phil Falcone. He was banned from the hedge fund industry for five years under a deal with federal regulators in August after admitting to improperly borrowing more than $100 million from the fund and giving preferential treatment to some clients.
Falcone, who is still listed as FGL’s “ultimate controlling person” on the offering prospectus, was also banned from serving as an FGL officer or director for seven years by the New York State insurance regulator.
Credit Suisse, J.P. Morgan and Jefferies are serving as lead joint book-running managers and as representatives of the underwriters for the offering. Macquarie Capital and RBC Capital Markets are acting as book-running managers. Nomura, Sandler O’Neill + Partners, L.P., Sterne Agee, Cantor Fitzgerald & Co. and Dowling & Partners Securities LLC are acting as co-managers, according to FGL.
Fidelity & Guaranty specializes in the kind of fixed, indexed annuities that are also sold by West Des Moines-based American Equity Life, and Apollo Global Management’s Athene insurance arm – formerly known as Aviva USA. It also sells life insurance.
Des Moines-based FGL serves as the operating company for a Delaware-based holding company called Fidelity & Guaranty Life. The latter is technically the company making the initial public offering and trading under the FGL ticker, according to Tyler.