US regulators limit insurer investment in Everton bidder 777 Partners

Regulators in two US states have pushed five insurers to scale back their investments in Everton bidder 777 Partners after they were found to have exceeded the limit on how much a company can invest in a single asset.

Utah and South Carolina’s regulators have asked insurers belonging to the A-Cap group to cut their exposure to the group, the Financial Times reported.

The insurers collectively control $11.5bn (£9.1bn) of assets with $2.9bn (£2.3bn) of that invested in entities related to 777 Partners.

The two states have maximums that a company can invest in a single issuer, with South Caroline being three per cent and Utah 10 per cent.

The paper reported that the group’s investment in 777 Partners and its related entitles exceeded the cap by $1.8bn (£1.4bn).

777 Partners is one of the world’s largest multi-club ownership groups and currently has shareholdings in seven different clubs. 

In September 2023, the private equity group signed an agreement to acquire British-Iranian billionaire Farhad Moshiri‘s full stake in Everton. 

After seven months from the deal being announced, it is still pending approval from the Premier League. The Financial Conduct Authority is reported to have given clearance to the group. 

A-Cap controls Sentinel Security Life, Haymarket Insurance and Jazz Reinsurance in Utah, and Atlantic Coast Life Insurance and Southern Atlantic Re in South Carolina. All five insurers were in violation of limits on single-issuer exposure, the paper reported.

Regulators in Utah and South Carolina are now working to issue “supervision orders”, the FT reported, which would allow them to direct the insurers to follow the rules.

A source close to A-Cap told the FT that other parties had already been found to take on its 777 Partners exposure, which it said the memo “grossly overstated”.

The group can appeal the orders from the regulators and challenge the calculations behind them.

A 777 Partners spokesperson said: “A-Cap is one of a number of lenders to 777 Partners and its 60 portfolio companies. As is standard practice in the industry, 777 is bound by confidentiality regarding the specifics of its loan activity.

“As it relates to the proposed acquisition of Everton FC, 777 Partners is confident in its ability to fund both the transaction and the club’s three-year business plan, the details of which it has provided to the Premier League as part of its ongoing process of regulatory approval.”