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Athene Holding Ltd. shares traded higher in their market debut, as the provider of fixed-annuities further gives the lethargic market for initial public offerings a lift late in the year.

Athene shares opened at $43.56, above its IPO price of $40. Shortly after the open, the stock traded as high as $44.62 before retreating recently to $43.86.

Athene is one of the top sellers of U.S. fixed annuities by dollars sold, according to industry-funded research firm Limra, after a series of acquisitions of fixed-annuities businesses in recent years. The insurer, backed by private-equity firm Apollo Global Management LLC, guarantees steady payments to millions of retirees and other consumers through savings contracts that promise to pay buyers a set amount of interest each year.

The selling shareholders of Athene raised $1.1 billion in an IPO late Thursday, according to people familiar with the matter. That makes Athene the second-biggest U.S.-listed company to debut in 2016, according to Dealogic.

Athene's shares priced at $40 apiece and 27 million shares were sold, according to people familiar with the offering. The company expected to sell 23.75 million shares at between $38 to $42 a share. Shares are trading on the New York Stock Exchange under the symbol ATH.

A successful debut could set the stage for a revitalized IPO market in 2017, some bankers and analysts said. The pipeline for new offerings in the coming months includes Travel BV, which plans to change its name to Trivago, and Snapchat parent Snap Inc. How a big IPO like Bermuda-based Athene prices and trades in its debut often serves as a litmus test for companies waiting in the wings to go public.

The deal comes at the end of what is on track to be the slowest year for U.S.-listed IPOs by money raised since 2003 even if Athene is added to the tally, according to Dealogic. The biggest IPO of the year so far was ZTO Express Inc., which raised $1.4 billion in an October deal that valued the Shanghai-based logistics company at roughly $14 billion, Dealogic data show.

Meanwhile, the outlook has brightened for the financial-services sector, potentially boosting investor interest in the annuities provider, some analysts and money managers said.

Financial companies in the S&P 500 are up 18% since the U.S. presidential election, on investors' expectations of loosened regulation and higher interest rates under President-elect Donald Trump. The broader S&P 500 index has risen 5% in that time.

Last spring, the Labor Department issued a new regulation that toughens standards for financial advisers recommending certain insurance-company products, including some annuities, to retirement savers. While Mr. Trump hasn't directly addressed the fiduciary rules, one of his top advisers has said publicly that they should be repealed.

As Athene pitched its IPO to potential investors at the Ritz Carlton in Boston this month, management acknowledged, but also played down, the potentially adverse impact of the fiduciary rules, according to one person in attendance.

Athene's fast growth as it scooped up fixed-annuity businesses helped spur a regulatory debate about whether private-equity firms and other nontraditional buyers of annuity-focused insurers might be taking excessive risks in pursuit of profits.

Apollo earns fees overseeing credit, real estate and other investments that back Athene's annuity products. Apollo affiliates raked in $268 million in asset-management and other fees related to Athene last year, according to regulatory filings.

Doug Butler, research director at Rockland Trust, said the relationship doesn't deter him from considering buying into the deal and, if anything, could be a potential positive.

Athene had said the company itself wouldn't receive any of the proceeds from the public sale of stock. Rather, the IPO stands to benefit executives at the buyout firm who own shares.

"Apollo does not need Athene to be successful, but it certainly helps," Mr. Butler said.

Athene's IPO was led by Goldman Sachs Group Inc., Barclays PLC, Citigroup Inc. and Wells Fargo & Co.

Write to Corrie Driebusch at corrie.driebusch@wsj.com

(END) Dow Jones Newswires

December 09, 2016 11:35 ET (16:35 GMT)

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