Shares in Genworth Mortgage Insurance Australia Ltd (ASX: GMA) are jumping into the green today. At the time of writing the Genworth share price is $2.86, up 8.33%.
Genworth climbed as high as $2.92 in early morning trading before retracing to its current level.
Investors are responding to a company announcement that alternative investment manager Ares Management Corp has taken a stake in the company.
Why are Genworth shares spiking today?
Genworth confirmed today it was made aware that alternative investment manager Ares Management has acquired a minority stake.
Ares is an alternatives giant and has its tentacles wrapped around credit, private equity, real estate, and other secondary markets. Since its inception in 1997, Ares has grown its assets under management (AUM) substantially.
The fact Ares has taken a spot in the front row of Genworth's equity show is no minor news. The United States-based fund manager became public in 2014. In 2018 it became a body corporate, the first alternative asset manager to do so.
With Ares on its register, Genworth has the full force of US$295 billion in AUM behind it, via the fund manager's book. It remains to be seen if Ares aims to take a more active role in the company.
And best believe Genworth acknowledges the investment as a vote of confidence in the company's growth narrative.
"Genworth welcomes this investment by Ares in the Company as an indication of the value it sees in Genworth's business," the release noted.
Back in January, the company's share price popped after announcing it was selected as the exclusive provider of lenders mortgage insurance (LMI) to the Commonwealth Bank of Australia. Specifically, for the big bank's CBA and Residential Mortgage Group (RMG) businesses.
Genworth will announce its financial results for the full year ending 31 December 2021 on 25 February, per today's release.
Genworth share price snapshot
In the past 12 months the Genworth share price has climbed just 4%. Although it has jumped more than 23% this year to date.
Over the last month of trading, shares have gained 18% and are now front-running the major indices since 4 January.
