InsuranceAUM.com

Episode 126: Macro Environment Impact on Middle Market Lending with Kevin Marchetti of Varagon Capital Partners

In this episode of the InsuranceAUM.com Podcast, host Stewart Foley is joined by Kevin Marchetti, Partner and Chief Risk Officer at Varagon Capital Partners, to discuss the impact of the current macro environment on middle market lending. With interest rates rising and inflation presenting challenges, Kevin provides an in-depth look at how Varagon’s approach—focusing on resilient, recession-resistant industries and maintaining strict credit terms—has positioned the firm to navigate these turbulent times. They explore the resilience of Varagon’s portfolio, strategies for stress testing loans, and the importance of working with private equity-backed companies to ensure stronger outcomes even in challenging markets.

The conversation also touches on the broader economic landscape, including the ripple effects of recent stress in the banking sector and how private credit lenders are poised to step in where traditional banks may retreat. Kevin shares his insights on deal flow trends, the challenges of finding quality opportunities, and the outlook for middle market lending as 2023 progresses.

Episode 125: Investing Across the Credit Spectrum with Bryan Krug, Managing Director and Portfolio Manager on the Artisan Partners Credit Team

In this episode of the InsuranceAUM.com Podcast, host Stewart Foley sits down with Bryan Krug, Managing Director and Portfolio Manager on Artisan Partners’ Credit Team, to explore the evolving dynamics of credit markets. They dive into the changes Bryan has observed over his 24-year career in credit, examining the growth in high-yield and leveraged loan markets, the rise of private credit, and the factors that drive companies to choose between public and private debt solutions.

Bryan shares insights on navigating the current macroeconomic landscape, highlighting how interest rate hikes are impacting credit quality, particularly in private markets. He also discusses risk and return across different segments of the credit spectrum, providing valuable context for investors evaluating their credit allocations. This conversation offers a comprehensive overview of the factors shaping today’s credit environment and how to navigate the opportunities and challenges ahead.

Episode 124: Executive Spotlight: Phil Titolo, Head of Direct Private Investments at MassMutual

Welcome to an Executive Spotlight edition of the InsuranceAUM.com Podcast, where host Stewart Foley sits down with Phil Titolo, Head of Direct Private Investments at MassMutual, to discuss how his team identifies unique investment opportunities outside traditional asset allocation buckets. They dive into MassMutual’s approach to private investments, focusing on assets that can provide diversification and resilience in a complex economic environment.

Phil shares his insights on the growing role of private credit in filling gaps left by banks, especially in today’s shifting regulatory landscape. Stewart and Phil also cover the dynamics of the credit cycle, including the rise of “zombie companies,” and where Phil sees potential mispricing and hidden risks in the market. This episode wraps up with a fascinating take on who Phil would choose to meet from the history of the Federal Reserve.

Episode 123: Gold on Gold with Max Gold, Head of Gold Strategies at State Street Global Advisors

In today’s episode, host Stewart Foley welcomes Max Gold, Head of Gold Strategies at State Street Global Advisors, to demystify the unique role of gold as an asset class. Max shares insights on what drives the gold market, covering short-term market flows, medium-term factors like interest rates and inflation, and long-term fundamentals including demand sectors such as jewelry, technology, and central bank activity. He also discusses how gold’s low correlation with traditional assets enhances portfolio stability, especially for insurance investors focused on risk management and capital preservation.

Max provides a comparison between gold and other commodities, highlighting gold's unique function as a store of value and its role as a potential inflation hedge. For institutional investors, he outlines practical ways to access gold at scale and details the different vehicles available to help maximize gold's efficiency in a diversified portfolio.

Episode 122: Climate and Energy Transition in Emerging Markets with Matt Christ, PM at Ninety One

In today’s episode, host Stewart Foley welcomes Matt Christ, Managing Principal and Head of the Transition Debt Strategy at Ninety One, to discuss climate and energy transition in emerging markets. Matt explores how Ninety One’s approach is driving real-world decarbonization by actively engaging with heavy-emitting sectors, including power, industry, and transportation, instead of simply divesting from these high-emission assets. He also delves into Ninety One’s unique use of both public and private credit to create impact and enhance returns, while addressing concerns around greenwashing and transition washing with rigorous, science-based carbon impact assessments.

Matt also shares insights on how geopolitical tensions and the demand for energy security are spurring opportunities in renewable energy sources, including solar and green hydrogen, particularly in markets like India. He wraps up with his thoughts on the importance of climate investing today, even with imperfect data, encouraging investors to prioritize near-term progress over waiting for perfect metrics.

Episode 121: Executive Spotlight: Patrizio M. Urciuoli, Head of Strategy and Asset Allocation for Liberty Mutual Investments

In today’s Executive Spotlight episode, host Stewart Foley welcomes Patrizio Urciuoli, Head of Strategy and Asset Allocation at Liberty Mutual Investments. Patrizio shares how Liberty Mutual’s investment philosophy uniquely aligns with its mission as a mutual insurance company, creating capital to meet policyholder needs and support business growth. Drawing on parallels between his lifelong passion for sailing and his approach to strategy, Patrizio explains how clear vision, adaptability, and resilience guide both Liberty Mutual’s investment decisions and his leadership style.

Together, they discuss the current macro environment and the importance of building a flexible portfolio amidst rapid change and tightening credit conditions. Patrizio also shares Liberty Mutual's approach to ESG, emphasizing how incorporating sustainability into investment decisions allows for both smarter risk management and growth opportunities, especially in energy transition. Throughout, Patrizio stresses the importance of cross-functional synergy, showcasing Liberty Mutual’s collaborative approach to navigating today’s complex market landscape.

Episode 120: Liquidity Matters: A Panel of Experts’ Discussion

In today’s episode of the InsuranceAUM.com podcast, host Stewart Foley leads a panel discussion on a critical and timely issue: liquidity and its impact on the insurance industry. Joined by an impressive lineup of experts, including Mike Ashton of Enduring Investments, Bill Poutsiaka, former CIO of AIG’s P&C business, Geoff Cornell, former CIO of Corebridge, and regulatory expert Amnon Levy of Bridgeway Analytics, the panel dives deep into liquidity risk in the wake of recent financial shocks.

The discussion covers insights from Silicon Valley Bank's recent liquidity crisis and the broader implications for insurance companies. Panelists examine how liquidity demands affect asset-liability management, the role of governance, and the significance of stress-testing assumptions under current market conditions. Amnon Levy provides perspective on regulatory evolutions post-Financial Crisis, while Geoff Cornell and Bill Poutsiaka address the critical need for internal risk evaluations that go beyond traditional models.

Tune in to hear their thoughts on navigating today's shifting landscape, managing market volatility, and maintaining a balanced, resilient portfolio.

Episode 119: BDC Bond Masterclass with Radcliffe Capital Management’s Steve Katznelson

In today’s episode, Stewart Foley sits down with Steve Katznelson, Founder and CIO of Radcliffe Capital Management, to explore Business Development Company (BDC) bonds and their potential value for insurance portfolios. Steve explains that BDCs, which invest in diversified, secured loans to mid-market American companies, offer high levels of downside protection due to regulated leverage limits. This unique structure can provide bondholders with significant security, even in volatile markets.

Steve further discusses why BDC bonds, though relatively new, are seeing growing interest as an investment-grade opportunity. With similarities to CLOs but generally higher yields and added protections, BDCs offer an attractive niche for those seeking stable, high-quality returns.

Episode 118: 2023 Insurance Asset Management Technology and Investment Outlook with SS&C’s Scott Kurland

In this episode, Stewart Foley is joined by Scott Kurland, Managing Director of SS&C Technologies' Insurance Solutions Group, for a forward-looking discussion on the top technology and investment trends shaping insurance asset management in 2023. Scott shares insights on the increasingly vital role of technology in managing the complexities of private market investing, explaining how AI-driven tools like natural language processing (NLP) and optical character recognition (OCR) are revolutionizing data processing for alternative assets, streamlining everything from reconciliation to reporting. Scott also highlights key trends, such as the convergence of insurance and private equity investments, the rising demand for co-sourcing and outsourcing, and the shift toward cloud-native solutions to optimize workflows and boost efficiency across insurance operations.

As Scott explains, the growing adoption of digital automation and intelligent workflow is empowering insurance companies to leverage complex asset classes like real estate and bank loans while mitigating operational challenges. He also emphasizes the importance of reassessing traditional operating models, especially in today’s tight talent market, noting how firms like SS&C enable insurers to capitalize on market opportunities with cutting-edge technology and service solutions.

Episode 117: An Interview with Nicos Scordis: A Leading Academic’s Insights on Insurance Asset Management

In this insightful episode of the InsuranceAUM.com podcast, Stewart Foley welcomes Dr. Nicos Scordis, the John R. Cox Ace Limited Chair of Risk and Insurance at St. John's University, to explore the complexities of value creation in insurance asset management. Dr. Scordis, a highly respected academic, shares his unique insights into how insurers create value, diving into the nuanced roles of underwriting, investment strategy, and regulatory constraints in determining an insurer's financial success.

The conversation explores traditional views and challenges in insurance asset management, including how float operates as an investment tool, the option-like nature of insurance contracts, and the pivotal role of underwriting in creating competitive advantage. Dr. Scordis introduces a fresh perspective, emphasizing that investment policy should align closely with underwriting policy to ensure balanced value creation and avoid shifts between policyholder and shareholder benefits. The discussion also highlights investment constraints imposed by regulatory requirements, surplus management, and asset liability matching, illustrating the complexity of achieving portfolio efficiency within these boundaries.

Stewart and Dr. Scordis also tackle the ongoing debate between investing for yield versus total return, noting that regulatory guidelines and business goals often sway the choice. They conclude with an exploration of whether insurers can realistically aim to achieve durable alpha within the industry’s constraints.