InsuranceAUM.com

Episode 177: Data centers: What is driving the surge in demand and how can insurance investors benefit?

In this episode of the InsuranceAUM.com podcast, host Stewart Foley, CFA, sits down with Jeff Menz and Casey Miller, both Managing Directors of Portfolio Management at Principal Real Estate Investors, to delve into the fast-growing data center sector. They discuss what constitutes a modern data center, the key drivers behind its rising demand—such as AI, 5G technology, and the Internet of Things—and the types of tenants typically involved, including hyperscale users like Amazon and Google. Jeff and Casey also highlight important considerations for insurance investors, such as infrastructure needs, the long-term nature of data center leases, and how these investments can provide stable, bond-like returns. They emphasize the sector's resilience and continued growth potential, making it a compelling opportunity for insurance asset managers.

Episode 176: Executive Spotlight: Betsy Ziegler, CEO of 1871

In this episode, Stewart Foley, CFA, sits down with Betsy Ziegler, CEO of 1871, to explore the groundbreaking launch of 1871's first-ever Insurance Innovation Lab. Betsy, who has a deep background in the insurance industry, discusses the lab's focus on key themes such as litigation, claims, subrogation, back-office productivity, and preparing for volatility. She explains how the lab aims to bring together growth companies, established corporates, and industry experts to drive meaningful innovation in the insurance sector.

Betsy also shares insights into 1871's broader mission as a non-profit innovation hub, supporting companies at every stage of their development. With nearly 500 early-stage companies under its wing and a proven track record of fostering growth and creating jobs, 1871 continues to be a major force in the tech and innovation landscape. Tune in to hear how the Insurance Innovation Lab is set to impact the future of the industry and why 1871 is at the forefront of this exciting initiative.

Episode 175: Distressed Credit and Special Situations with Paul Triggiani of Invesco

In this episode of the InsuranceAUM.com podcast, Stewart Foley, CFA, delves into the world of private distressed credit and special situations with Paul Triggiani, Managing Director and Head of Distressed Credit and Special Situations at Invesco Private Credit. Paul shares his insights on the definition of distressed debt, the types of distressed assets his team specializes in, and how they approach the management of these investments. He highlights the differences between trading distressed debt and pursuing debt for control, explaining that his team focuses on acquiring majority positions in distressed debt to eventually convert it into equity ownership. Paul also discusses the broader macroeconomic environment, emphasizing how the growth of the leveraged credit market, particularly in Europe, has expanded the opportunity set for distressed investors.

Paul further explores how Invesco assesses credit risk, the importance of buying assets at a discount to their intrinsic value, and the firm's focus on mitigating downside risk. He explains how rising interest rates have impacted small-cap borrowers and how these challenges have influenced Invesco’s strategies. Additionally, Paul highlights the increasing role of special situations transactions, such as rescue financings, as private equity firms proactively address liquidity needs. The episode concludes with a discussion on the attractive features of distressed debt for insurance companies, emphasizing its potential for generating equity-like returns with credit protection.

Episode 174: Broad Street Consulting – The Godmothers of Insurance Asset Management Search

In this engaging episode of the InsuranceAUM.com podcast, host Stewart Foley, CFA, sits down with Margot DeMore and Milena Humplik, the co-founders and managing partners of Broad Street Consulting Group, a firm specializing in insurance asset management search. Referred to as the "godmothers of insurance asset management search," Margot and Milena share their unique journeys into the industry, with Milena recounting her family's escape from Czechoslovakia and eventual success in the U.S., and Margot discussing her formative experiences at Boston Latin School that fueled her passion for diversity and inclusion.

The discussion dives deep into the current landscape of insurance asset management, exploring the significant demand for talent in the sector. They emphasize the importance of firms having a long-term commitment to building their insurance business and the challenges of attracting and retaining top talent. Margot and Milena also offer valuable advice for both distribution leaders looking to break into the insurance space and insurance asset allocators facing attrition. The episode wraps up with insights on the future of the insurance asset management industry and the importance of maintaining a strong professional network and brand.

Episode 173: Myth busting and impact investing in public fixed income with Nuveen’s Stephen Liberatore and Joseph Pursley

In this episode of the InsuranceAUM.com podcast, host Stewart Foley is joined by Steve Liberatore, Senior Managing Director and Head of ESG Impact Investing Global Fixed Income at Nuveen, and Joe Pursley, Head of Insurance the Americas at Nuveen, to debunk myths within the fixed income universe. The conversation dives deep into the evolution of impact investing, particularly in fixed income, challenging the misconception that impact investing is limited to equity strategies. Steve highlights how impact investing in fixed income not only drives positive environmental and social outcomes but also enhances financial performance, emphasizing that responsible investing doesn’t mean sacrificing returns.

The discussion also explores the growing market for impact bonds, including lesser-known blue and orange bonds, and how these instruments align with broader ESG goals. The trio touches on the critical role insurance companies can play in impact investing, given their substantial fixed income portfolios, and the opportunity to leverage assets to mitigate liabilities related to climate risk. The episode wraps up with personal insights from Steve and Joe, including advice on parenthood and a fascinating hypothetical lunch with baseball legend Joe DiMaggio.

Episode 172: Best Opportunities in Private Markets with Drew Schardt of Hamilton Lane

In this episode of the InsuranceAUM.com Podcast, Stewart Foley is joined by Drew Schardt, Vice Chairman and Head of Investment Strategy at Hamilton Lane. With over 30 years of experience in private markets, Drew delves into the evolution of private credit, explaining its role in today’s economic landscape and its appeal to insurance companies. He discusses the key factors driving the expansion of private credit, including the pullback of traditional banks and the increasing demand for private debt solutions. Drew also highlights Hamilton Lane’s unique approach to private equity, offering insights into the firm’s strategic focus on information access and advanced technology solutions to enhance investment decisions.

Drew further explores the top opportunities in private markets, emphasizing the importance of private credit in the current macro environment. He offers a detailed overview of Hamilton Lane’s market outlook, covering potential trends in 2024, including inflation, valuations, and liquidity. Whether you’re an experienced investor or new to private markets, this episode provides valuable perspectives on navigating the complexities of private equity and private credit, particularly within the insurance industry.

*figures are as of 6/30/23

Episode 171: Extending the Concept of Private Credit into Real Assets

In this episode of the InsuranceAUM.com Podcast, host Stewart Foley is joined by Matt Addesa, Private Market Specialist at DWS, to explore the world of real assets and private debt. Matt delves into the current landscape of real estate and infrastructure debt, explaining where these asset classes fit within the broader private credit space. He highlights the growing opportunities in alternative real estate financing due to stress in regional banks and provides insight into how institutional investors can capitalize on these shifts. Matt also touches on the performance history and fundamentals of real asset debt, offering a detailed breakdown of the relative value opportunities across different sectors.

Matt further discusses the need for infrastructure investment in the U.S., emphasizing the $2.6 trillion funding gap in critical sectors such as transportation, electricity, and water infrastructure. He explains DWS's unique approach to infrastructure and real estate debt, highlighting the importance of asset quality, sponsor relationships, and flexibility in accessing these markets. Whether you’re a seasoned investor or new to real asset private debt, this episode provides essential insights into navigating these evolving opportunities in today's market.

Episode 170: AEW: Insights and Opportunities in Real Estate Debt

In this episode of the InsuranceAUM.com Podcast, host Stewart Foley sits down with Dean Dulchinos, Head of Debt Portfolio Management, and Justin Pinckney, Head of Private Debt at AEW, to discuss the compelling opportunities in the commercial real estate (CRE) debt space. Dean and Justin provide an in-depth analysis of the current market environment, highlighting the impact of macroeconomic headwinds and the secular shift in office demand. They explain why the CRE debt market is leading the cycle in terms of value adjustments and how private capital can capitalize on the banks pulling out of CRE lending. The conversation touches on the structural advantages of CRE debt, including better collateralization, lower loan-to-value ratios, and attractive yield premiums in a high-rate environment.

Dean and Justin also explore how CRE debt compares to direct lending, emphasizing its collateral-backed structure and superior optionality in uncertain markets. They outline the implementation strategies for P&C, life, and health insurance companies, detailing how these institutions can navigate the CRE debt space for diversification and yield enhancement. Whether you're an insurance professional or an institutional investor, this episode offers valuable insights into the risks, rewards, and opportunities in the evolving CRE debt landscape.

Episode 169: Today’s Risk Environment with Juliette Kayyem

In this compelling episode, Stewart Foley interviews Juliette Kayyem, a senior national security analyst for CNN and a Pulitzer Prize finalist. Juliette shares her unique insights on two of the most pressing issues of our time: the Israeli-Hamas conflict and the impact of climate change on the insurance industry. Drawing on her experience in government, academia, and media, she explains the broader "threat environment," shedding light on Israel’s intelligence and response failures, the evolving geopolitical risks, and the delicate balance required to prevent escalation.

The conversation shifts to climate risk, where Juliette discusses the increasing severity of natural disasters and their profound impact on insurance companies' ability to assess and price risk. She highlights the regulatory challenges and the urgent need for more sophisticated modeling to help consumers and policymakers understand the growing risks of climate change. This episode offers listeners a deep dive into the intersection of national security, climate, and insurance, with expert commentary that bridges these crucial topics.

Episode 168: Quality High Yield Offers Performance Resilience and Diversification

In this episode of the InsuranceAUM.com podcast, Stewart Foley sits down with Paul Massaro, Head of Global High Yield Franchise at T. Rowe Price, to discuss the leveraged credit market and how the current economic landscape impacts high-yield bonds. Paul offers a deep dive into the structure and evolution of the $1.4 trillion high-yield bond market, emphasizing its growing quality and resilience. They discuss the surprising outperformance of leveraged credit in 2023, despite ongoing macroeconomic challenges, and how high-yield bonds offer unique diversification benefits to insurance portfolios.

Paul also shares insights into T. Rowe Price's approach to high-yield allocation within fixed income portfolios, discusses where he and his team are finding value, and highlights the importance of capitalizing on short windows of opportunity in volatile markets. This episode is essential for insurance investment professionals looking to better understand the high-yield space and how it can fit into diversified portfolios, especially in today’s uncertain economic environment.