Global Financial Stability Notes

Private Equity and Life Insurers

Author/Editor:

Fabio Cortes ; Mohamed Diaby ; Peter Windsor

Publication Date:

December 19, 2023

Electronic Access:

Free Download. Use the free Adobe Acrobat Reader to view this PDF file

Summary:

This Global Financial Stability Note studies the growing trend of private equity (PE) investments into the life insurance industry. PE companies’ investments in life insurers are integral to their strategic growth as PE firms evolve beyond the traditional leveraged buyout transaction to acquire diverse businesses across private credit, structured credit, private real estate funds, and private infrastructure funds. This note reviews the growth in PE investments through the lens of the diverse acquisition incentives and strategies, the consequent changes to asset allocation and investment strategies of the acquired life businesses, and potential prudential and policy implications.

Series:

Global Financial Stability Notes No 2023/001

Subject:

Asset allocation Asset and liability management Credit Economic sectors Financial crises Financial institutions Financial statements Insurance Insurance companies Money Public financial management (PFM)

Frequency:

occasional