Oaktree Capital Management’s deal to acquire a controlling stake in Atlantic Coast Life Insurance Co., owned by Advantage Capital Holdings (A-Cap), has collapsed due to regulatory concerns over the insurer’s ties to the defunct investment firm 777 Partners. Oaktree, known for acquiring distressed assets, is no longer pursuing the March agreement, though both parties remain open to alternative structures. South Carolina’s insurance regulator has raised alarms about Atlantic Coast’s potential exposure to 777, which faces allegations of defrauding investors of nearly $500 million.
Co-founder Josh Wander recently pleaded guilty to wire and securities fraud. A-Cap maintains it is working constructively with Oaktree to find a transaction acceptable to regulators. The South Carolina Department of Insurance, which oversees Atlantic Coast, declined to comment, as did Brookfield Asset Management, Oaktree’s parent.
Atlantic Coast and its subsidiary Southern Atlantic Re have faced scrutiny over questionable loans to 777, with regulators alleging asset overvaluation and undisclosed affiliate investments. Director Michael Wise recently sought emergency rehabilitation of the firms, citing a “financially hazardous” position. The insurers countered with a lawsuit, later dismissed.
In the wake of these developments, AM Best downgraded Atlantic Coast Life and Sentinel Security Life, citing weakened balance sheets and operational performance in early 2026. A-Cap disputes the downgrade, asserting ongoing capital strengthening and restructuring efforts.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing