Nassau Financial Group, Golub Capital forge strategic partnership with $200m investment

Nassau Financial Group (“Nassau”), renowned for its fixed annuities and asset management services, and Golub Capital, a leader in direct lending and credit asset management, have announced a strategic partnership underscored by a significant $200 million equity investment. This non-voting common equity investment from Golub Capital marks a pivotal step in supporting Nassau’s ambitious growth strategy, which includes both organic growth initiatives and strategic acquisitions.

Enhancing Financial Strategies and Market Presence

The collaboration extends beyond financial investment, featuring a long-term Investment Management Agreement. This agreement grants Nassau’s insurance subsidiaries access to Golub Capital’s esteemed middle market direct lending strategies, offering tailored, capital-efficient solutions. This strategic move is designed to enhance Nassau’s balance sheet and expand its investment capabilities, fostering continued growth and stability.

Phil Gass, Chairman and CEO of Nassau, expressed enthusiasm about the partnership, noting, “In addition to their significant capital investment, Golub Capital brings a market-leading track record in direct lending that will expand our balance sheet investment capabilities in support of our continued growth.”

David Golub, President of Golub Capital, also commented on the partnership’s strategic significance, “Nassau has built an outstanding annuities business, and we are excited to be a part of the next chapter of its growth. This partnership also represents another key milestone in our Insurance Solutions efforts.”

Strategic Growth and Previous Investments

With this transaction, Golub Capital will become the largest minority equity holder in Nassau, following earlier investments from prominent firms such as Fortress Investment Group in 2023, and Wilton Reassurance Company and Stone Point Credit in 2021. Nassau was initially founded with capital support from Golden Gate Capital, which continues to be the majority controlling equity holder.

Advisory and Legal Framework

Goldman Sachs and Sidley Austin LLP provided exclusive financial and legal advisory services to Nassau for this transaction. Similarly, Morgan Stanley & Co. LLC, Kirkland & Ellis, and Foley Hoag offered their advisory expertise to Golub Capital.

Closing and Future Outlook

The deal is slated for completion in the second half of 2024, pending customary closing conditions and regulatory approvals. This strategic alliance is set to bolster Nassau’s capacity to innovate and expand, securing its position as a powerhouse in the financial services sector.