BlackRock scouts for insurance partnerships in private-debt push

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(Bloomberg) –BlackRock Inc.’s private-debt business is exploring ways to tap the deep pockets of insurance companies that are increasingly looking to boost their allocations to the asset class.

The world’s largest asset manager is actively looking to form partnerships with insurance companies that will help it increase its private-debt assets, said James Keenan, the firm’s global head of private debt. His team already manages assets on behalf of insurers, but doesn’t currently have any defined collaborations, like some other investment managers do.

Although it’s not yet clear what structure partnerships would take, they will be in the form of separately managed accounts and could resemble recent deals in the industry such as the 2022 tie-up between Blackstone Inc. and life insurer Resolution Life. That deal made Blackstone a key asset manager for the insurer, in charge of a cash pot that could hit more than $60 billion.

“We don’t want to be in the insurance space and write liabilities, but we will form collaborations with insurers,” Keenan told Bloomberg News last week at the SuperReturn International conference in Berlin.

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Private debt has been a hot topic in the insurance industry of late. Companies are looking to increase their allocations and benefit from the more attractive returns at a time when higher-for-longer interest rates have hurt the performance of other private-markets strategies, such as buyout funds, where insurers have also traditionally invested. 

BlackRock’s 2023 insurance report found the vast majority of respondents were planning to increase their allocations in private assets, with about 60% saying they would invest more in direct lending over the coming two years.

The New York-based firm oversees more than $10 trillion, primarily in its passive and active mutual funds that invest in listed stocks and bonds, but in recent years has made a greater foray into private markets. It now manages $85 billion in various private debt strategies, including direct lending, multidebt solutions, infrastructure and real estate debt.

As part of its efforts to expand the assets it runs for insurance companies, Keenan said his team is also encouraging existing insurance clients that invest in the firm’s other funds to pour more money into private-debt strategies.