Private Equity and Life Insurers
Global Financial Stability Notes, December 19, 2023
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Bibliographic details
- Authors: Fabio Cortes, Mohamed Diaby, Peter Windsor
- Published: December 19, 2023
- Series: Global Financial Stability Notes
- DOI: https://doi.org/10.5089/9798400257612.065
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.
- The note reviews the growth in PE investments through the lens of:
- diverse acquisition incentives and strategies;
- consequent changes to asset allocation and investment strategies of the acquired life businesses; and
- potential prudential and policy implications.
Key findings and themes
- Growth and strategic evolution:
- PE firms are evolving beyond the traditional leveraged buyout transaction into acquisitions across private credit, structured credit, private real estate funds, and private infrastructure funds.
- PE investments in life insurers are integral to PE firms’ strategic growth.
- Acquisition incentives and strategies:
- The note examines diverse acquisition incentives and strategies used by PE companies when investing in life insurers.
- Changes to acquired life businesses:
- The note reviews consequent changes to asset allocation and investment strategies of the acquired life businesses resulting from PE ownership.
- Prudential and policy implications:
- The note identifies potential prudential and policy implications arising from the trend of PE investments into the life insurance industry.
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- Private Equity and Life Insurers