KKR & Co. will pay approximately 2.7 billion dollars in cash to acquire the remaining 37% of Global Atlantic that it does not already own. This expands its bet on insurance to promote growth in assets and fees.

The buyout company will finance the purchase from its balance sheet, which contained $23 billion in cash and investments as of September 30, KKR said in a statement on Wednesday. The transaction, along with a series of strategic initiatives, is expected to increase post-tax per-share distribution earnings by approximately 10% in 2024, according to a separate presentation.

"Global Atlantic was a great investment for us," said co-CEO Scott Nuttall in an interview. "It has become a significant part of KKR, and we believe that through full collaboration, we can achieve even more." With the acquisition, KKR gains access to Global Atlantic's retail distribution platform, which benefits from its growing wealth business, and creates opportunities for the company's capital markets unit, he added.

The insurer will continue to operate under the Global Atlantic brand and retain its management team, which is expected to exchange the majority of its stake for KKR shares. The deal is expected to be completed in the first quarter.

Alternative asset managers have turned to insurers to tap into a stable source of capital, as traditional sources such as pension funds and foundations become increasingly difficult to access. KKR initially acquired around 60% of Global Atlantic in February 2021, valued at approximately $4.7 billion, which is a company specializing in retirement and life insurance. This move aligns KKR with other private equity firms that are acquiring stakes in annuity providers.

"The transition from a diverse group of shareholders to a single one with KKR clarifies our goals and enables us to think - and invest - in the long term," said Global Atlantic CEO Allan Levine in the statement. The insurer was founded in 2004 as part of Goldman Sachs Group Inc. and became an independent company in 2013. According to the statement, the insurer's assets grew from $72 billion in 2020 to $158 billion. Global Atlantic was a significant driver of growth in real estate loans and secured financing, KKR stated.

The private equity company outlined a series of strategic changes aimed at increasing profits and aligning the company better with shareholders. The core investments in KKR & Co.'s bilateral private equity balance positions will be moved to a new strategic investment segment, from which it is expected that more recurring dividends will flow, according to the statement.

The strategy includes about $35 billion of assets, including $6.5 billion on KKR's balance sheet. The company is also changing its compensation structures to increase the share of employees in realized investments and better align it with its shareholders. According to the presentation, employees will receive 70% to 80% of realized investments, compared to the current 60% to 70%. They will receive 15% to 20% of fee-related profits, compared to 20% to 25%.

A new reporting metric, the overall operating result, includes fee-related earnings, operating earnings from strategic investments, and operating earnings from insurance, corresponding to Global Atlantic.

The stocks of KKR, based in New York, have generated a return of 51% this year, including reinvested dividends, surpassing their biggest competitors.