Unite Here, a union opposed to a Brookfield Asset Management Reinsurance deal to acquire an Iowa insurer, is trying an old-fashioned method to get regulators’ attention: billboard advertising.
United Here is behind the prominent billboard on Fleur Drive, located less than a mile from the Iowa Insurance Division. That agency will need to approve any sale of Des Moines-based American Equity Investment Life Holding Co. to Brookfield.
“Are you ready for Brookfield’s ‘office real estate apocalypse’?” the billboard asks.
Brookfield Re is paying $4.3 billion for American Equity, a big seller of fixed annuities. Both companies have said they expect their deal to close during the first half of 2024.
Meanwhile, Unite Here represents more than 300,000 workers in the United States and Canada and is in an ongoing dispute with Brookfield Corp. regarding benefits and working conditions at hotels Brookfield owns. The union continues to be a thorn in the side of Brookfield, claiming the company is engaging in risky investment practices with policyholder funds.
“Brookfield’s plans for redeploying 40% of American Equity’s assets into its own private credit instruments could be an inauspicious turning point for the annuity industry,” said Marty Leary, director of research for Unite Here. “But it doesn’t have to be. Regulators could put conditions on the acquisition to forestall overly-aggressive investment strategies or regulatory/accounting arbitrage, and/or to provide some modest protections for annuitants.”
Brookfield pursuit of insurers
American Equity is the second significant deal for Brookfield Re to acquire an insurance company.
Previously, Brookfield Re acquired American National, headquartered in Galveston, Texas, in a $5.1 billion deal that officially closed in May 2022. In the four reporting quarters since Brookfield Re acquired American National, the latter company booked more than $4.7 billion in Brookfield investments, Unite Here noted.
“Meanwhile, Brookfield has handed back the keys or defaulted on more than a billion dollars in real estate loans this year alone, and we are aware of at least $5 billion more in Brookfield real estate loans that have been identified by third-parties as troubled or distressed,” Leary said.
The billboard is just another way to “communicate and create dialogue with the annuity and pension communities,” he added. Unite Here also created a website heavily devoted to Brookfield news. The billboard is costing $3,900 a month, Leary said.
‘Blatantly false statements’
A Brookfield spokesperson released the following statement:
“These blatantly false statements are being made by Unite Here, a hotel workers’ union that is not concerned in the least with the insurance industry nor interested in protecting investors or policyholders. The union has one goal: To attack our other businesses in any way they can to coerce us into agreeing to the union’s demands relating to our hotel business.
“We remain committed, as we always have, to negotiating in good faith with the union regarding our hotels, but we will not stand by and allow the union to launch irresponsible and factually inaccurate attacks on our other businesses. We will stick to the facts, and we urge the union to do the same by shutting down its irrelevant side-shows and negotiating with us in good faith.
“Brookfield has a very clear responsible contracting policy across all our businesses, and a strong track record of being a responsible and judicious investor entrusted by unions throughout the US.”
Long known as Brookfield Asset Management Inc., the Toronto-based firm became Brookfield Corp. in December 2022. The firm then spun off 25% interest in their asset management business into the new publicly listed Brookfield Asset Management Ltd. Brookfield Corp. oversees several Brookfield subsidiaries.
Brookfield Re is a separate standalone company, of which Brookfield Corp. owns less than 5% of its shares.
InsuranceNewsNet Senior Editor John Hilton covered business and other beats in more than 20 years of daily journalism. John may be reached at email@example.com. Follow him on Twitter @INNJohnH.
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