DOJ Investigates Mark Walter Over Insurance Capital Use

The United States Department of Justice is investigating billionaire Mark Walter and his business empire regarding the use of insurance capital to finance private credit and illiquid investments. Federal investigators are specifically scrutinizing loans that were not properly marked as affiliated transactions.

In response to the probe, Walter's holding company, TWG Global, announced it will wind down up to $6.5 billion in exposure to affiliated businesses. This process involves buying assets from Delaware Life Insurance Co. and replacing them with unaffiliated investments. Additionally, Clear Spring Life and Annuity Co. reduced related-party transactions by $90 million. These steps are part of a broader effort to unwind more than $20 billion in loans and investments that the insurers admitted should have been classified as affiliated transactions.

Amidst the federal investigation, Walter agreed to sell the Los Angeles Lakers for $12.5 billion and is considering the sale of his stake in Chelsea Football Club. Simultaneously, Guggenheim Partners, the investment firm led by Walter, saw its tied financing entity report a sharp decline in second-quarter earnings.