Benzinga | Feb 24, 2021 08:15AM EST

Aflac Reports Strategic Partnership With Sound Point Capital Mgmt. For Initial $1.5B Allocation To Create Sound Point Commercial Real Estate Finance

Aflac Global Investments, the asset management subsidiary of Aflac Incorporated, announced today that it is partnering with Sound Point Capital Management, LP (Sound Point) to create a new asset management business focused on the real estate loan market. Aflac Global Investments has made an initial $1.5 billion allocation to the newly created Sound Point Commercial Real Estate Finance, LLC, with $500 million of this amount dedicated to providing transitional and other debt financing to support economically distressed communities designated as Qualified Opportunity Zones. Upon regulatory approval, Aflac will hold a 9.9% minority interest with the ability to grow our stake over time in line with future growth of the new venture.

Aflac Incorporated Executive Vice President, Global Chief Investment Officer and President of Aflac Global Investments Eric M. Kirsch said, "This relationship with Sound Point represents another important step in the Aflac Global Investments growth strategy of leveraging our balance sheet to create additional value for Aflac and our stakeholders through strategic equity partnerships. Transitional real estate loans are a strategically important part of our investment portfolio, offering attractive returns in a high-quality asset class. We are especially pleased to commit a portion of our capital to directly support development in those communities that need it most by dedicating $500 million toward Opportunity Zones in the United States."

"Sound Point is pleased to have a quality partner like Aflac, who shares our vision for the opportunities in commercial real estate lending," said Stephen Ketchum, founder and managing partner of Sound Point. "We look forward to growing our platform, which we feel is well positioned to build on our expertise in commercial real estate. We are thrilled to work with Aflac in providing capital to underserved neighborhoods and communities."

Opportunity Zones were created by the Tax Cuts and Jobs Act of 2017 to drive economic development and job creation by encouraging long-term investments in economically distressed communities nationwide. Aflac's decision to provide critical lending support for Opportunity Zones illustrates the company's ongoing commitment to its Environmental, Social and Governance (ESG) program. Companies like Aflac and Sound Point are raising the bar on responsible investing and helping to empower diverse investors.

Bradley E. Dyslin, Aflac Global Investments senior managing director, global head of credit and strategic investment opportunities, added, "We are excited to partner with Sound Point in the creation of Sound Point Commercial Real Estate Finance. Sound Point's history of identifying pockets of opportunity within credit-based lending such as transitional real estate aligns well with Aflac's portfolio strategy. We are especially thrilled with our shared desire to invest in solutions that improve our communities and support economic empowerment."

"Together with Aflac, Sound Point can now expand its reach across the U.S. commercial real estate markets," said Don MacKinnon, portfolio manager and head of Sound Point's CRE group. "We are proud of our approach to underwriting and the team we have built, and we expect there will be no shortage of highly compelling investment opportunities for our strategic partnership."