Blackstone Deal Shows Funds Wooing Insurers Still Works
The finance industry is polarizing between two different approaches to investment firms accessing captive capital.
The old model of fund managers hitching themselves to insurance companies can still have a happy ending.
Photograph: Hulton Archive/Getty Images
If these are good times for mergers and acquisitions bankers, they’re great for those whose Rolodex is stuffed with contacts in asset management and insurance. The challenges in equities and the opportunities in private credit are forcing a rejig of the relationship between the two connected industries — and everyone is grappling with the best form of cohabitation.
In the traditional model, insurers had in-house asset-management businesses to oversee the capital backing pension plans, annuities and life-insurance liabilities. It made sense to take on external customers too. Think of Allianz SE’s ownership of both fixed-income specialist Pacific Investment Management Co. and the more diversified Allianz Global Investors. M&G Plc, carved out of insurer Prudential Plc in 2019, took some insurance assets with it too.