NEW YORK: It had already been a tough 2026 for Acrisure.
Part financial technology (fintech), part insurance broker, the firm said in late May it would cut 11% of its workforce, or some 2,250 people, as part of a sweeping overhaul to modernise operations.
Some of its bonds and loans had fallen, but still remained above levels typically deemed distressed.
So, the last thing the Grand Rapids, Michigan-based firm needed was fresh attention on its connections to Wall Street billionaire Mark Walter’s empire, which has come under scrutiny from US prosecutors and regulators.
Guggenheim Investments, the asset-management arm of Walter’s Guggenheim Partners, participated on behalf of certain clients in Acrisure’s US$725mil funding round in 2022.
While Bain Capital led a larger capital raise last year, valuing the company at US$32bil, no existing investor exited, according to a statement at the time.
When compared with other entities caught up in the Guggenheim firestorm, the links are tenuous. But, on top of what else Acrisure is managing – including a second-quarter earnings decline – it’s left a mark on Acrisure’s bonds and loans – and, by extension, dented the speculative-grade market’s biggest indexes as well.
Of all the borrowers in the Bloomberg US Leveraged Loan Index, Acrisure’s had the biggest negative impact in August, with the price of its US$4.4bil loan due in 2030 dropping 10% since the start of the month to about 83 cents on the dollar last Friday.
It was also the second biggest drag this month on the Bloomberg US Corporate High Yield Bond Index, with US$1.1bil of its securities due in 2030 hitting as low as roughly 87 cents.
“Guggenheim participated in prior Acrisure preferred equity financings in 2021 and 2022 as a minority investor,” a spokesperson for Acrisure said in an emailed statement.
“Any efforts to turn that into a broader narrative about the company are simply wrong. The relationship is being overstated in a way that doesn’t reflect the facts.”
Some debt investors agree the link is overblown, noting some short sellers are leveraging the Guggenheim situation to pressure the junk bonds, according to people familiar with the matter.
But it nonetheless underscores how the probe into potential financial improprieties at two of Walter’s insurance companies and at Guggenheim Partners is reverberating across credit markets.
And as Walter works to assuage concerns about any fallout, financial firms have been distancing themselves from his complex.
That includes investment grade firms. Bonds of life insurer Sammons Financial Group tumbled this month after a Hunterbrook Media report about its Guggenheim connections.
Sammons has said in a statement it owns a non-voting and non-controlling, minority interest in Guggenheim Capital “which it has been divesting over the past several years”.
Amid the scrutiny, Guggenheim’s own debt – a loan from Guggenheim Investments’ financing entity – also plunged before regaining some ground.
TWG Global, the holding company at the heart of Walter’s empire, has defended itself against what it called “multipronged attacks”, and is working with the US Department of Justice and the Securities and Exchange Commission to resolve their inquiries, it said this week.
A representative for Guggenheim didn’t respond to a request for comment.
For Acrisure, the Guggenheim noise compounds a more common institutional anxiety; its status as a highly leveraged borrower contending with recent lackluster earnings.
In the second quarter, earnings before interest, taxes, depreciation and amortisation fell around 12% to about US$345mil, the people said, asking not to be identified discussing private information. — Bloomberg
