By Arasu Kannagi Basil
Aug 26 (Reuters) - Billionaire Mark Walter's holding company, TWG Global, is working with U.S. regulators to address concerns over related-party investments on the books of his insurance companies, the firm said in a statement on Wednesday, adding there had been "no fraud."
Group 1001, a TWG entity that owns Delaware Life Insurance Company and Clear Spring Life and Annuity Company, has filed a plan with the Delaware Department of Insurance to eliminate all of the affiliated exposure
at the insurance companies, TWG said in the statement.
"This is a straightforward plan to reduce affiliate exposure on the books of the insurance companies in an orderly, measured manner that is beneficial to both the insurance companies and TWG," TWG said, adding the Delaware Department of Insurance was evaluating the plan.
Walter's TWG spans financial services, sports, AI and technology. He is best known for his stakes in major professional sports teams, including the Los Angeles Dodgers and the Cadillac Formula 1 team.
U.S. prosecutors are investigating insurance companies controlled by Walter over whether certain private credit investments were wrongly categorized as unaffiliated investments, according to prior regulatory filings by the insurers.
Delaware Life and Clear Spring were subpoenaed by the U.S. Attorney's Office for the Southern District of New York earlier this year, while the U.S. Securities and Exchange Commission has also been conducting a parallel investigation, according to the filings.
TWG said on Wednesday it was working with the U.S. Department of Justice and the SEC to address their inquiries.
The SEC and the DOJ did not immediately respond to Reuters' requests for comment.
In June, Delaware Life restated its annual financial statements and reclassified large portions of its private credit investments as related-party assets.
The restatement lifted Delaware Life's affiliated investments to 42% of invested assets at the end of 2025 from less than 5%.
Insurers are allowed to hold affiliated investments, but they are subject to regulatory requirements and supervisory review as they can present unique risks and potential conflicts of interest, according to the National Association of Insurance Commissioners.
TWG earlier this month had agreed to swap up to $6.5 billion of Delaware Life's related-party investments for an equivalent amount of assets classified as independent.
The transaction, subject to regulatory approval, could reduce Delaware Life's total affiliated assets to roughly 26% of invested assets from 39% as of June 30, according to the insurer.
NOT LOOKING TO SELL SPORTS ASSETS AT "FIRE SALE" PRICES
TWG said on Wednesday the firm, Walter and his partners continue to get interest from prospective buyers and co-investors in their sports assets, but it wasn't looking to sell them at "fire sale" prices to raise capital for its insurance operations.
Walter earlier this month struck a deal to sell the Los Angeles Lakers for a record $12.5 billion to venture capitalist Joshua Kushner and former Disney CEO Bob Iger.
The Los Angeles Dodgers team is not being sold and no sale process has been initiated, TWG said.
"Similarly, TWG is not considering exiting its stake in the Cadillac Formula 1 team or any other part of TWG Motorsports," TWG said.
Walter's business also includes investment bank and advisory firm Guggenheim Partners and a private investment business.
(Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Saumyadeb Chakrabarty)
