Conflicts mount in insurance-private credit tie-ups
The guest argued that the rapid integration of life insurance and annuity platforms with private equity firms creates latent risks and potential conflicts of interest over asset origination and distribution.
The argument
Firms like Apollo (via Athene) have pioneered using long-term annuity liabilities to fund long-term private assets. However, regulators are scrutinizing the overlapping incentives where insurance policyholder funds are directed into private credit assets originated by the parent firm, often involving complex cross-shareholdings.
The thesis, stress-tested
✓ What validates it
- ✓State or international insurance regulators tightening rules on affiliate asset transactions
- ✓Increased capital charges for insurers holding private credit assets
▸ Risks discussed
- ▸Regulatory crackdowns on offshore (Bermuda/Cayman) insurance structures
- ▸Misaligned incentives between policyholders and asset originators
Hear it yourself
"Take us back because I'm interested in you've been covering financials since we established this in our intentional investor conversation, the nineties. Yeah. That one so you've been following and tracking financials, broad brushstroke, at a global level for a couple of years now. Take me through just, like, the emergence of private credit. Take me through 2008 sort of, like, forward and what's going on with lending and trying to make the system safer, make this operate better. Give me some background context on this. So the rules changed in 2009, 2010. And the objective of a"
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