Regulatory Concerns Over Insurance Investments Impact Everton’s Prospective Purchase

In a development impacting the potential acquisition of Everton Football Club by the Miami-based investment firm 777 Partners, state authorities in Utah and South Carolina have taken steps against five insurance companies under the A-Cap umbrella. This action follows revelations from a Financial Times report about a confidential memo, signaling regulatory efforts to protect individuals reliant on annuities and insurance products, particularly vulnerable groups such as retirees, widows, and orphans. The regulators’ intervention is in response to A-Cap’s significant financial engagement with 777 Partners, which has exceeded regulatory limits on single-issuer investments, raising flags over the financial stability and practices of both entities.

A-Cap, managing assets worth $11.5 billion, has $2.9 billion tied to 777-affiliated ventures, notably surpassing the permissible investment exposure. This has led to the issuance of "supervision orders" by the state regulators, demanding rectification of these breaches. A-Cap disputes the memo’s portrayal of its exposure levels and anticipates a resolution, though the company’s compliance with regulatory standards remains under examination.

Complications are further heightened by 777 Partners’ entanglement in legal issues and scrutiny over its diversified investment strategies. Nevertheless, A-Cap asserts its commitment to responsible operations, working with regulatory bodies to realign its investment focus away from 777-related interests.

This situation casts shadows over 777 Partners’ efforts to take over Everton, with actions by the Bermuda Monetary Authority against 777 Re— a key financial conduit for 777 Partners—potentially obstructing the availability of funds crucial for the acquisition. These developments place 777’s ownership bid under rigorous examination by the Premier League, against the backdrop of Everton’s financial duress.

Who is 777 partners? Launched in 2015 by Josh Wander and Steve Pasko, 777 Partners aims to eschew reliance on external financing, focusing on building a self-sufficient business model. The firm’s investment in soccer, aiming to add Everton to its portfolio of seven teams, is part of a broader strategy, despite concerns over financial management and implications for Everton’s future stability and performance.