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Aegon (AEG) Unit Closes Investment, Commences ESG-Centric Venture

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The asset management arm of Aegon N.V. AEG — Aegon Asset Management (Aegon AM) recently closed its initial investment linked with the $600 million ESG-focused equity venture entered into with the global private equity real estate firm Taurus Investment Holdings LLC in March 2022. The basic aim of the venture was to purchase value-add multifamily assets and convert these buildings into low-carbon, energy-efficient ones.

The recently completed investment of Aegon was directed toward acquiring the first value-add multifamily asset of the venture located in Florida and constructed more than four decades ago, Canopy Villa Apartments. Both the parties in the ESG-centric venture will make use of their multifamily value-add investment expertise for managing the investment. Meanwhile, the subsidiary of Taurus (RENU Communities) will do the needful to significantly minimize the energy consumption and carbon output of those acquired assets.

This, in turn, is expected to upgrade property operations of buildings that otherwise tend to lose their efficiency with the passage of time, leading to woes for real estate owners and operators. Aegon’s move to participate in the ESG-centric venture seems prudent, considering increased returns to its investors as a result of combining the multifamily value-add strategy with a unique decarbonization effort.

Initiatives similar to the latest one highlight Aegon’s sincere efforts to reinforce its reputation as a high-quality investment strategy provider across varied asset classes. Aegon AM’s specialist global investment platforms further strengthen its reputation. Constant acquisitions of buildings similar to the Canopy Villa Apartments are likely to bolster AEG’s asset portfolio. As of Mar 31, 2022, Aegon manages and offers advice on assets worth $432 billion for its diverse client base spread across the globe.

Aegon focuses on extracting capital from Financial Assets and businesses that are not part of its core and growth markets. The released capital is utilized to pursue growth opportunities in the Asset Management business. To boost the operating margin of its Global Platforms, Aegon AM aims to achieve efficiency and boost growth. The power of Aegon’s investment capabilities is evident from its continual uptick in third-party net deposits on the Global Platforms. In the first quarter of 2022, third-party net deposits increased more than a three-fold year over year. Growing third-party net deposits continue to drive management fees of the Aegon AM unit, which remains the most significant contributor to revenues of the business.

Shares of Aegon have rallied 14.8% in the past year against the industry’s decline of 16.5%. AEG currently carries a Zacks Rank #3 (Hold).

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Stocks to Consider

Some better-ranked stocks in the insurance space include Assurant, Inc. AIZ, MGIC Investment Corporation MTG and Everest Re Group, Ltd. RE. While Assurant sports a Zacks Rank #1 (Strong Buy), MGIC Investment and Everest Re each carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Assurant’s earnings surpassed estimates in each of the last four quarters, the average surprise being 18.31%. The Zacks Consensus Estimate for Assurant’s 2022 earnings suggests an improvement of 37.6% from the year-ago reported figure, while the same for revenues suggests growth of 4.9%. The consensus mark for AIZ’s 2022 earnings has moved north by 3.2% in the past 30 days.

The bottom line of MGIC Investment outpaced earnings estimates in three of the last four quarters and met once, the average surprise being 10.94%. The Zacks Consensus Estimate for MGIC Investment’s 2022 earnings suggests an improvement of 18.9% from the year-ago reported figure. The consensus mark for MTG’s 2022 earnings has moved north by 8.6% in the past 30 days.

Everest Re’s earnings surpassed estimates in two of the trailing four quarters and missed twice, the average surprise being 20.35%. The Zacks Consensus Estimate for Everest Re’s 2022 earnings indicates a rise of 18.3% year over year, while the same for revenues suggests an improvement of 10.7%. The consensus mark for RE’ 2022 earnings has moved north by 7.1% in the past 30 days.

Shares of Assurant and Everest Re have rallied 11.5% and 7.7%, respectively, in a year. Meanwhile, MGIC Investment’s stock has declined 7.2% in the same period.


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