Chibuike Obuh, David French

NEW YORK, (Reuters) – Canada Pension Plan Investment Board is looking to sell its Wilton RE and Ascot Group insurance platform. This marks a significant strategic change for the fund, according to people who are familiar with the matter.

Sources say that CPP Investments plans to start the sales process for the company in January. According to sources, Wilton Re might be worth over $4 billion. Ascot Group’s potential valuation is unknown.

Sources spoke under condition of anonymity. They cautioned that neither business is guaranteed to make a deal.

CPP Investments declined to comment.

Private equity firms and investment managers including Blackstone (NYSE:) Inc, Brookfield Asset Management and KKR & Co (NYSE:) Inc have been building up their insurance arms in the last two years.

They are looking for a way to utilize the capital they have accumulated from annuities or life insurance policies in order to invest in corporate credits. Here, money managers will be able to lock in spreads between what they owe and the return. The historically low interest rate environment is making it harder for insurers to continue servicing the policies.

Apollo Global Management’s (NYSE:) success with Athene Holding Ltd. has fueled their enthusiasm. Apollo plans to buy the $11 million reinsurance platform from Athene Holding (NYSE:) Ltd. in January. It will represent around 40% of Apollo’s total $481 billion assets.

CPP Investments in Toronto, which is a retirement fund manager for 20 million Canadians has been a pioneer in this area.

Wilton Re is a life and annuity insurer that takes over and reinsures the portfolios of insurance companies. In 2014 it acquired Wilton Re for $1.8 Billion. Ascot Group was purchased by American International Group (NYSE) in 2016 for $1.1 Billion.

The company also purchased credit companies that it could use for investment in the insurance assets. Antares Capital was acquired by it. This lender is available to businesses. General Electric For $12 billion, 2015 (NYSE:

The competition is increasing, and it’s becoming harder for insurers to offer the annuity or life insurance policies that CPP Investments requires to make the spreads on credit product spreads, so it decided to sell its insurance business.

Wilton Re in Norwalk is Connecticut’s holding company. This includes Wilton Reassurance Company (Texas Life Insurance Company), Wilco Life Insurance Company (Wilco Life Insurance Company) and many other insurance and risk-management entities.

Ascot Group offers global insurance and products in reinsurance through its Lloyd’s operations as well as the platform it has in Bermuda. According to Ascot U.S., the company has U.S. operation under its Ethos and Ascot U.S. brand names.