InsuranceAUM.com

Episode 242: Uncovering value in investment grade private credit

In this episode of the InsuranceAUM.com Podcast, Stewart Foley is joined by Michael Zorich, Managing Director and Head of Investment Grade (IG) Private Credit at Principal Asset Management, for an in-depth discussion on the growing relevance of investment grade private credit in today’s market. Michael shares his expertise on how IG private credit offers investors a combination of relative value, covenants, better recoveries, and diversification, making it an attractive asset class for insurance companies and institutional investors. He explains how current economic conditions, particularly rising interest rates, have led to increased attention on the sector, especially as investors seek risk-adjusted returns in less volatile spaces compared to other areas like direct lending.

 

Michael also discusses the evolution of private credit markets, the role of club deals, and the various sectors, such as infrastructure and real estate, that present opportunities and risks. As an experienced leader at Principal, he highlights the firm’s 50-year history in private placements, their focus on infrastructure investments, and the extensive customizations they offer to meet client needs. This episode provides valuable insights into how insurance investors can uncover value in IG private credit while navigating today’s complex economic landscape.

Episode 241: What insurance investors should know about the US election with Invesco’s Andy Blocker

In this insightful episode of the InsuranceAUM.com Podcast, Stewart Foley sits down with Andy Blocker, Global Head of Public Policy and Strategic Partnerships at Invesco, to dissect the key political developments shaping the U.S. election. They explore the unprecedented shifts in the political landscape, including the impact of Biden's decision to step aside, Kamala Harris's rise, and the ripple effects of Trump’s ongoing legal battles. Andy provides a thorough analysis of the "path to victory" for both Harris and Trump, offering listeners a unique perspective on how each candidate’s approach to messaging, demographics, and policy could define the outcome of the 2024 election.

 

As the conversation deepens, Andy shares his thoughts on critical topics like the abortion debate, fiscal policy, and the implications of regulatory agendas, particularly for the financial services industry. He also touches on the growing influence of U.S.-China relations and ESG considerations in the election's aftermath. This episode offers a comprehensive overview of the potential market and investment impacts tied to the election, making it an essential listen for insurance investors who need to stay informed on the political and economic factors driving the future of their portfolios.

Episode 240: Revolutionizing Fixed Income: Systematic Fixed Income in Insurance Portfolios

In this episode of the InsuranceAUM.com podcast, host Stewart Foley sits down with Paul Benson, Head of Systematic Fixed Income at Insight Investment, to dive deep into systematic fixed income and its growing relevance in today’s investment landscape. Paul discusses the evolution of systematic strategies since Insight’s early adoption in 2001, focusing on key innovations such as credit portfolio trading and enhanced liquidity in the high-yield markets. He also touches on the growing role of ETFs and how they integrate with insurance companies' portfolio needs.

 

The conversation further explores the customization potential of systematic strategies to fit the unique constraints insurance companies face, such as capital charges, duration, and rating bucket optimization. Paul shares insights on how rising rates have reshaped the private credit and high-yield landscape, and why high-yield bonds are becoming increasingly attractive for income-focused insurance portfolios. This episode provides valuable lessons for insurance investment professionals interested in integrating systematic fixed income into their strategic asset allocation.

Episode 239: The Evolution of IG Private Credit: Insights from PPM’s Luke Stifflear

Stifflear, Portfolio Manager and Head of Investment Grade Private Credit at PPM. Luke brings over 30 years of experience at PPM, providing deep insights into the world of investment grade private credit. He explains how this asset class, typically dominated by insurance companies, differs from the more commonly discussed high-yield private credit. Luke sheds light on the benefits of investment grade private credit, including enhanced covenant protection, better spread premiums, and diversification opportunities that make it a compelling alternative to public bonds. He also discusses the evolution of this market, particularly in the context of bank pullbacks and the growing interest from institutional investors.

 

The conversation further explores the state of market liquidity, deal flow dynamics, and how PPM's long-standing presence in the industry offers unique advantages in accessing off-the-run tenors and securing favorable deals. Luke also shares his views on the importance of relative value decisions between public and private markets, emphasizing how consistent capital deployment and strong market relationships have helped PPM maintain a competitive edge. This episode is packed with valuable takeaways for anyone interested in the strategic aspects of investment grade private credit and its role in diversified portfolios.

Episode 238: Inside Private Equity: Insights from Aaron Sack of Morgan Stanley

In this episode of the InsuranceAUM.com Podcast, host Stewart Foley sits down with Aaron Sack, Head of Morgan Stanley Capital Partners, for an in-depth conversation about the world of private equity. Aaron shares his journey from a liberal arts background to leading one of the most respected private equity teams at Morgan Stanley. The discussion covers Aaron's early experiences, the evolution of private equity, and the unique aspects of middle-market buyout strategies. Aaron provides insights into how private equity has grown from a niche industry into a major force in global finance, and he reflects on the lessons learned from the 2008 financial crisis, which continue to shape his investment approach today.

 

The conversation also explores the importance of team building and culture in private equity, emphasizing the need for alignment, respect, and shared values in a successful investment team. Aaron's approach to leadership and his perspective on the value of liberal arts in finance offer a unique and refreshing take on what it means to succeed in the private equity space. This episode is packed with valuable insights for anyone interested in the inner workings of private equity and the future of this dynamic asset class.

Episode 237: Capturing the benefits of Infrastructure Debt

In this episode of the InsuranceAUM.com podcast, Stewart Foley, CFA, explores the growing demand and opportunities within the infrastructure debt market with two key experts from Brookfield Asset Management: Hadley Peer Marshall, Managing Director, Co-Head of Infrastructure Debt and Structured Solutions Strategies, and CFO, and Eric Wittleder, Managing Director of Infrastructure. The discussion delves into the major trends driving the infrastructure sector, particularly the significant capital required for global transition initiatives such as net-zero carbon emissions, and how these trends present unique opportunities for institutional investors like insurance companies.

 

Hadley and Eric also highlight the characteristics of an optimized infrastructure debt portfolio, emphasizing the essential, non-cyclical nature of the assets and their ability to provide material downside protection. They share insights on how Brookfield aligns its infrastructure investments with sustainability goals without compromising on returns, and discuss the impact of regulatory changes on the market. This episode offers valuable perspectives on how insurers can effectively leverage infrastructure debt within their portfolios while contributing to environmental sustainability.

Episode 236: The Future of Private Credit with Ashwin Krishnan & Jeff Levin of Morgan Stanley

In this episode of the InsuranceAUM.com Podcast, host Stewart Foley dives into the future of private credit with Ashwin Krishnan, Managing Director, Co-Head of North American Private Credit, and Head of Opportunistic Credit, and Jeff Levin, Managing Director, Portfolio Manager, and Head of Direct Lending, both at Morgan Stanley Investment Management. They explore the evolution of private credit and its growing relevance in today's financial landscape, particularly for insurance investors. Ashwin and Jeff discuss the parallels between the current state of private credit and the rise of private equity 25 years ago, highlighting how the asset class has moved from niche to mainstream. They emphasize the importance of flexibility in capital solutions and the ability to navigate various points across the capital structure to generate the best risk-adjusted returns.

 

The discussion also touches on the impact of rising interest rates on leverage ratios and how Morgan Stanley Investment Management's approach sets them apart from competitors. By leveraging the firm's vast resources and global reach, they are able to provide unique capital solutions that cater to the needs of private issuers across North America. Whether it's accessing a broader deal flow or offering value-added services like M&A advice, their platform is designed to deliver comprehensive solutions to clients. The conversation wraps up with insights into the scalability of private credit and the importance of a long-term investment perspective in this ever-evolving market.

Episode 235: Private Equity Meets Insurance: Insights from Altamont Capital's Sam Gaynor

In this episode of the InsuranceAUM.com Podcast, host Stewart Foley sits down with Sam Gaynor, Managing Director at Altamont Capital Partners, to explore the dynamic world of private equity with a focus on long-term control investments in the middle market. Sam shares insights into Altamont’s investment strategies, including their successful de novo incubation ventures and the critical role of partnering with strong management teams. The discussion delves into the innovative approaches Altamont has taken in the financial services sector, highlighting key success stories like Kuvare and Accelerant.

 

Sam also offers his perspective on the future of private equity, the evolving landscape of insurance investments, and the impact of market consolidation. With valuable takeaways for investors and industry professionals alike, this episode provides a comprehensive look at how Altamont is navigating and shaping the future of middle-market investments.

Episode 234: Avoiding Negative Yield: Flexible Co-Sourcing Models for Insurance Investment Operations

In this episode of the InsuranceAUM.com Podcast, host Stewart Foley is joined by Scott Kurland, Managing Director at SS&C Technologies, for an insightful discussion on a new concept they call "negative yield." They delve into how insurers can avoid this negative yield by adopting a flexible co-sourcing investment operating model. Scott explains how co-sourcing allows insurance companies to maintain control over core operations while outsourcing specific investment accounting and administrative tasks to a trusted partner like SS&C.

 

They explore the growing trend toward private credit and structured investments, and how these asset classes can be cumbersome to manage internally. Scott details how co-sourcing can help insurers efficiently handle complex investment portfolios, such as residential whole loans, without overwhelming internal teams. By leveraging cloud-based technology and specialized expertise, insurers can optimize their investment returns and maintain a competitive edge.

 

The conversation also touches on the importance of transparency, the use of AI in investment accounting, and how co-sourcing can be tailored to meet the specific needs of different insurers. Whether you're a CIO or a CRO considering co-sourcing, this episode offers valuable insights into how this model can enhance your investment operations.

Episode 233: Regulatory Capital Relief (RCR): A Primer with Eagle Point Credit’s Karan Chabba

In this episode of the InsuranceAUM.com podcast, host Stewart Foley sits down with Karan Chabba, Principal and Head of Regulatory Capital Relief (RCR) and Specialty Finance at Eagle Point Credit Management. They dive deep into the evolving landscape of regulatory capital relief and synthetic risk transfer (SRT) transactions. Karan shares insights into why Eagle Point has ventured into this niche area, explaining the appeal of these structures for banks seeking to manage their capital requirements efficiently.

 

Karan also elaborates on how Eagle Point leverages its expertise across multiple credit sectors, including CLOs and structured finance, to identify and seize opportunities in both the RCR and specialty finance spaces. This episode offers a comprehensive understanding of how Eagle Point navigates the complexities of these markets, providing valuable takeaways for investors interested in exploring these unique and growing investment areas.

 

Tune in to learn more about how Eagle Point Credit Management is setting itself apart in the world of specialty finance and RCR, and why this area is gaining more attention from banks and investors alike.