Phila's Hillman runs $75B for global rich and Blackstone

The former Philadelphia Financial Group Inc. is now the U.S. branch of Lombard International, a $75 billion-asset  life insurance and annuity administration firm specializing in tax-sheltered financial arrangements for rich people around the world.

In June, the Blackstone investment firm bought control of Philadelphia Financial from Tiptree Financial Inc. (a Tricadia Holdings affiliate backed by JPMorgan, Bank of America, UBS and others), and Philadelphia Financial executives led by founder John Hillman, for $155 million (plus future payments totalling $9 million). Blackstone has since combined Philadelphia Financial operations with Luxembourg-based Lombard International Assurance.

Hillman is now Executive Chairman of the combined firms, doing business as Lombard International. Lombard employs 500, including 100 at its Liberty Place office in Philadelphia, and issues policies, from the U.S. and the tax havens of Luxembourg, Guernsey and Bermuda, through agents at partner firms, to wealthy clients across the U.S., Europe and Latin America.

Philadelphia Financial in 2011 bought Florham Park, N.J.-based Hartford Life Private Placement LLC, paying $117.5 million. After that deal, the firm managed $40 billion in assets. The firm previously purchased Phoenix Life & Reassurance Co., New York and its AGL Life Assurance Co. affiliate. Philadelphia Financial was founded by Hillman in 1996.

According to an A.M. Best report last year, before the Blackstone acquisition and Lombard merger, Philadelphia Financial's insurance subsidiary merited an A- ("Excellent") financial strength rating, while the firm's issuer rating stood at bbb-. Philadelphia Financial was, Best found, "susceptible to an ever-changing regulatory landscape with respect to both domestic and international taxation." Best also noted "uneven" financial networks and "adequate, but below-average" capital ratios and "moderately high" financial leverage.