Multi-Asset Strategies

As demand for PPD continues to outstrip supply, we believe experienced and independent managers stand to gain in the second half of 2024.

The market for private placement debt (PPD) has continued to be active and healthy.

As of May 31, approximately 90 transactions totaling $45 billion in financing were completed—a 20% increase over the same period in 2023.¹ We credit much of that activity to persistent demand from insurance companies and pension funds seeking to diversify their fixed-income portfolios.

Familiar PPD sectors include utilities...

European insurers may now have to set aside more capital against long-term debt holdings than against long-term equity investments. Does that make sense?

Insurance companies had something to cheer about when the EU Commission Council and Parliament finalized the Solvency II review earlier this year.

As we discussed in an earlier post, the new regime eases solvency capital requirements (SCRs) for insurers, allowing them to reduce the amount of capital they must hold against potential losses on a wider array of longer-term equity investments (LTEIs)...

Lower capital charges on a broader array of long-term equity investments could encourage insurers to reshape their asset allocations.

Insurance companies must hold capital in proportion to their risk. While that burden eased in 2019 when the European Commission introduced the Long-Term Equity Investments (LTEI) category, reducing the capital charge on eligible investments to 22%, the stringent and sometimes ambiguous LTEI eligibility rules have dampened insurers’ appetite for longer-term equity holdings.