Bermudian-based insurer Athene Holding Ltd enjoyed a strong debut on the New York Stock Exchange on Friday as its shares finished the day more than 10 per cent higher than its initial public offering price.

The offering which sought to raise $1.1 billion from selling shares at $40 apiece was the third largest IPO in the United States this year, according to Bloomberg News.

And the market’s strong support for the life reinsurer and fixed-annuity provider came despite questions raised by rating agencies and industry observers over whether Athene’s investments are too risky for the type of business it does.

Bill Wheeler, the insurer’s president told The Royal Gazette that the company would benefit from the transparency that comes with being a publicly traded company.

Athene, trading under the ticker symbol “ATH”, closed its first day of trading on the NYSE at $44.05 in New York — 10.1 per cent over the IPO price — on the trading of more than 14.1 million shares.

Existing shareholders of Athene were looking to sell 27 million shares for a price $40 per share. None of the proceeds from the offering will go the company.

The firm is based in offices in Chesney House on Pitts Bay Road, where around 40 staff are employed, working for its life reinsurance business.

The company was founded in 2009 by James Belardi, the chief executive officer, formerly president of SunAmerica Life Insurance Company.

In the space of less than a decade, Athene has expanded into the seventh-largest provider of annuities in the US, through acquisitions as well as organic growth.

It has a $72 billion investment portfolio, about a fifth of which is managed by Apollo Global Management LLC, a major alternative investment manager headed by Leon Black.

In its commentary on the IPO, ratings agency Fitch said described Athene’s investment portfolio as “somewhat aggressive”.

Deep Banerjee, an analyst at S&P Global Ratings, has also stated: “The strategy of this company and how it’s run is very different from other insurance companies.”

Athene’s Mr Wheeler said the company was responsible for roughly one million annuities contracts, which include the promise a future stream of income to customers, usually in retirement.

“I would say that the criticisms about the investment portfolio being aggressive are unfair,” Mr Wheeler said.

“Apollo has been a great partner for Athene and helped capitalise the company and manages some of our investments.”

He said the process of becoming a public company had helped investors see how the company operated.

“Over the last two weeks we have sat down with many investors, who asked a lot of questions,” Mr Wheeler said. “Going through the IPO process gives us transparency.”

Athene generated $3.8 billion in sales during the first nine months of the year and the offering’s prospectus shows that the company earned operating income net of tax of $476 million during the January through September period.

Athene will not receive proceeds from the sale, the filing shows. Selling shareholders include Apollo, a unit of Ontario Teachers’ Pension Plan Board and Teacher Retirement System of Texas.

Mr Wheeler said he expected the Bermuda business to continue to expand and added that Athene would benefit from demographics.

“The ageing population means that retirement products are becoming a bigger and bigger business.

“Many people are putting their hard-earned savings into our hands,” he added. “We have to take good care of those savings and make them grow.”

In its commentary on the Athene IPO, Fitch said it did not consider the offering to be a ratings event, as the company itself would receive no proceeds and the intention for the IPO had been first declared in May and so was fully expected.

“Athene commenced operations in 2009 and has grown quickly primarily through acquisitions, but has also developed a competitive retail operation,” Fitch stated.

“While the company’s operating history is relatively short, Athene is led by a team with extensive industry experience in managing net investment spread businesses within life insurance companies. Additional senior executive level hires over the past couple of years has reduced key person risk.

“Athene’s ratings continue to be supported by the company’s ongoing strong earnings, solid capital position, lack of financial leverage, and market leadership position in the fixed-indexed annuity market. The ratings also reflect the company’s very rapid acquisition-driven growth, relatively short operating history, narrow business profile, and somewhat aggressive investment portfolio.”

The offering follows another Bermuda IPO in September, when Butterfield Bank shares debuted on the NYSE, Michael Dunkley, the Premier, accompanied the bank’s executives in ringing the opening bell and the Gombeys caused a stir by invaded the trading floor.

Goldman Sachs, Barclays, Citigroup and Wells Fargo Securities are acting as joint bookrunners of the Athene offering.