$22 billion AUM

led investor group has acquired

led investor group has acquired

Financial advisor to Security Benefit Corporation, parent of Rydex SGI

Financial advisor to Security Benefit Corporation, parent of Rydex SGI

February 2010

Freeman & Co. Acted as Financial Advisor to Security Benefit Corporation, Parent of Rydex SGI
February 2010
Asset Management
Sell-Side M&A

Guggenheim led investor group acquired Rydex|SGI

August 02, 2010 (New York, NY) - Guggenheim Partners, LLC and Security Benefit Corporation (Security Benefit) today announced the closing of the acquisition of Security Benefit by a Guggenheim Partners-led group of investors, after receiving the required regulatory, policyholder and shareholder approvals.

The Guggenheim Partners-led investor group, which includes certain shareholders of Guggenheim Partners, is investing $400 million in the transaction to acquire Security Benefit. On July 30, 2010, $165 million of capital was injected into Security Benefit Life Insurance Company (SBL) following an initial $175 million infusion on Feb. 26, 2010. This infusion of capital is expected to result in upgrades in the financial strength ratings of SBL, Security Benefit’s primary life insurance company subsidiary and its affiliate, First Security Benefit Life Insurance and Annuity Company of New York (FSBL).

Boehly will serve as Chairman of the Board of Security Benefit in addition to retaining his role as Managing Partner in the Office of the CEO of Guggenheim Partners. Howard Fricke will serve as Vice Chairman of the Board and continue as Security Benefit President and CEO. Fricke had been serving as interim President and CEO since Feb. 16, 2010, after serving as Security Benefit President and CEO from 1988 to 2000 and Chairman from 1996 to 2006. In addition, Mark Walter, CEO of Guggenheim Partners, has joined Security Benefit’s Board of Directors.

Security Benefit’s primary businesses, which will benefit from continued capital investments in technology, product development and support as well as anticipated favorable improvements in the firm’s financial strength ratings, include:

  • Security Financial Resources – a leading provider of retirement plan services throughout the nation, primarily in the 403(b) education marketplace;
  • Security Benefit Life – providing fixed and variable annuities in all states except New York, and FSBL which provides fixed and variable annuities in New York;
  • se2 – an award-winning and nationally recognized provider of administrative services for the insurance and financial services industry with more than 700,000 policies and $30 billion in third-party assets under administration; and
  • SGI|Security Global Investors (known as Rydex|SGI in the financial intermediary market) – an asset management firm with approximately $20 billion in assets under management, offering institutional investors and financial intermediaries a broad spectrum of traditional and alternative investment strategies in separate accounts, mutual funds and ETFs.

Guggenheim Partners and Security Benefit began formally working together in the second quarter of 2009 when Guggenheim became the investment advisor for SBL’s general account. Since then, Guggenheim has been successful at continuing to improve the quality of the portfolio while increasing investment income.

Freeman & Co. acted as sole advisor to Security Benefit on the transaction.