Apollo Global Management is worth £5bn. the takeover of the Pension Insurance Corporation, one of the city’s largest specialist insurance companies.
Sky News has learned that Apollo is drawing up plans to make an offer for PIC in the coming days.
Other bidders are also said to be exploring bids for the company, which is owned by a consortium of investors.
PIC is one of a handful of specialists who take responsibility for large company pension schemes, and this year has struck deals with companies such as RSA, the UK general insurer.
It has also signed deals with Chemring and Qantas.
Other players operating in the pension risk transfer sector include Rothesay Life and Legal & General.
The market for BGL annuities has exploded in recent years as companies seek to eliminate a variety of pension-related financial risks.
Bloomberg News reported last month that PIC’s shareholders were considering a sale.
The company’s shareholders include CVC Capital Partners and Reinet, a vehicle backed by Johann Rupert, the billionaire Richemont chairman.
Apollo and PIC declined to comment.