Key Terms
securitization
financial
Securitization is when a bank or company takes a bunch of loans or assets, like mortgages or car loans, and bundles them together into a single package. They then sell pieces of this package to investors, who receive regular payments from the borrowers. This process helps the original lender get money quickly and spreads the risk among many investors.
forward-looking statements
regulatory
Forward-looking statements are predictions or plans that companies share about what they expect to happen in the future, like estimating sales or profits. They matter because they help investors understand a company’s outlook, but since they are based on guesses and assumptions, they can sometimes be wrong.
NEW YORK — Jefferies Financial Group Inc. (NYSE: JEF) announced a strategic acquisition of a 50% interest in Hildene Holding Company, LLC, the parent of Hildene Capital Management and its affiliates. Hildene, a credit‑focused alternative asset manager, oversees more than $18 billion in assets across hedge funds, separately managed accounts, drawdown, securitization and insurance‑solution products. The deal is timed with Hildene’s definitive agreement to acquire SILAC, Inc., the parent of SILAC Insurance Company, a provider of fixed indexed annuities.
Jefferies first partnered with Hildene in 2022, taking an existing revenue‑share position in the manager’s asset‑management business. Under the new agreement, Jefferies will swap its revenue‑share and a portion of its interest in a Hildene‑managed private fund for the 50% equity stake, together with a cash payment of $340 million. Hildene’s principals will contribute their existing ownership plus roughly $250 million of fund‑related equity, retaining the remaining 50% of the company. Subject to customary regulatory and client approvals, the transaction is slated to close in Q3 2026.
Upon closing, Hildene will also acquire a majority interest in Hildene Re SPC, Ltd., a Cayman Islands‑based life and annuity reinsurer focusing on single‑premium wealth accumulation and retirement products.
Jefferies’ cash outlay will be offset by an anticipated reduction of more than $500 million in its Leucadia Asset Management platform investments during 2026. The firm expects the Hildene investment to be immediately accretive to earnings and will account for the stake using the equity method, recognizing 50% of Hildene’s consolidated earnings. The transaction is projected to generate a pre‑tax gain of approximately $75 million from the fair‑value uplift of Jefferies’ pre‑transaction interest.
Conditional on regulatory clearance, Hildene will purchase the outstanding common equity of SILAC for $550 million in cash. As of September 30 2025, SILAC reported capital and surplus of about $505 million and total admitted assets near $10 billion. In 2024, SILAC originated roughly $2.5 billion of annuities, primarily fixed indexed products, and holds financial‑strength ratings of B (AM Best), BBB‑ (Fitch) and BBB (KBRA).
Rich Handler, CEO of Jefferies, and Brian Friedman, President of Jefferics, said, “We are pleased to deepen our partnership with Hildene as they acquire SILAC and broaden their long‑term opportunity. Originating and managing credit investment opportunities remains a core pillar of Jefferies’ strategy.”
Brett Jefferson, Founder, President and Co‑Chief Investment Officer of Hildene, added, “Since our launch in 2008, we have focused on innovative credit products that deliver strong risk‑adjusted returns. Expanding our relationship with Jefferies and completing the SILAC acquisition positions us to scale our platform, broaden origination capabilities, and support the long‑term interests of SILAC’s policyholders while meeting the evolving needs of our clients and capital partners.”
Strategic Rationale and Market Implications
The partnership underscores a broader industry trend where traditional investment banks are deepening ties with alternative credit managers to capture higher yields in a low‑interest‑rate environment. By taking a sizable equity stake, Jefferics gains direct exposure to Hildene’s structured‑credit expertise, which includes asset‑backed securities, distressed debt, and cash‑flow‑based lending—a segment that has demonstrated resilience amid market volatility.
Hildene’s acquisition of SILAC adds a fixed‑indexed annuity platform to its portfolio, granting access to a growing retirement‑savings market. Fixed indexed annuities have attracted savers seeking market‑linked upside with downside protection, a product mix that aligns well with Hildene’s credit‑oriented risk management framework. The combined entity can leverage cross‑selling opportunities, pairing credit‑linked investment strategies with insurance‑product distribution channels.
From a capital‑structure perspective, Jefferics is effectively reallocating capital from legacy asset‑management platforms toward a high‑growth, fee‑generating credit business. The projected $75 million pre‑tax gain reflects the market’s premium on Hildene’s earnings potential, while the anticipated accretion to net earnings suggests a favorable return on invested capital given the $340 million cash component.
Regulatory considerations remain a focal point. The transaction will require approvals from the U.S. Securities and Exchange Commission, state insurance regulators, and various client consents, especially given SILAC’s status as an insurance carrier. Successful clearance will set a precedent for further bank‑to‑alternative‑asset‑manager collaborations, potentially driving consolidation in the credit‑managed and annuity spaces.
Technical Outlook for Credit and Securitization Markets
Hildene’s expertise in structured‑credit vehicles positions it to capitalize on the resurgence of asset‑backed securities (ABS) driven by strong consumer loan demand and the gradual unwinding of legacy legacy exposure. The firm’s event‑driven strategy—targeting mispriced assets through rigorous quantitative analysis—aligns with emerging data‑science techniques, including machine‑learning models that enhance default‑risk forecasting.
In the securitization arena, the integration of insurance‑linked products (such as annuities) with credit portfolios could create hybrid instruments that offer diversified cash‑flow streams. This could appeal to institutional investors seeking stable, long‑duration assets amid uncertain macroeconomic conditions.
Overall, the Jefferics‑Hildene partnership illustrates a strategic convergence of banking, alternative credit management, and insurance distribution, reflecting a nuanced response to shifting yield curves, heightened investor demand for non‑traditional income sources, and the ongoing digital transformation of risk analytics.
About Jefferics Financial Group Inc.
Jefferics is a leading full‑service investment banking and capital‑markets firm that serves public and private companies, institutional investors, and governmental entities worldwide. The firm emphasizes a client‑first approach, differentiated insights, and a flat, agile operating structure.
About Hildene Capital Management
Hildene is an alternative asset manager focused on credit investing through structured‑credit and asset‑based credit strategies. Managing roughly $18 billion for a diverse client base—including hedge funds, drawdown vehicles, SMAs, insurance companies, and securitization structures—Hildene pursues event‑driven returns by identifying mispriced assets through deep quantitative research. Founded in 2008, the firm operates out of Durham, North Carolina and Stamford, Connecticut.
Forward‑Looking Statements
This release contains forward‑looking statements within the meaning of the safe‑harbor provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. Forward‑looking statements are subject to risks, uncertainties, and assumptions that could cause actual results to differ materially from those expressed or implied. Readers are cautioned to review the company’s SEC filings for a more complete discussion of risk factors.
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