PE-Owned Insurers Boosting Private Credit Holdings, Study Finds

Life insurance companies owned by private equity firms have quietly reshaped their portfolios, piling into higher-yielding alternative credit in a shift that’s entangled the industry with the broader financial system, according to a study from researchers at the Federal Reserve Bank of Chicago.

Private fund giants, including Apollo Global Management Inc. and KKR & Co., have snapped up life insurance firms over the past decade, changing how those insurers invest. From 2017 to 2024, PE-owned insurers’ investments in private placements for asset-backed securities and financial borrowers multiplied to 8% of assets from 2%, as stand-alone insurers rose to a more modest 4% from 3%, the study showed.