Legal & General Partners with Blackstone to Enhance Annuities and Credit Investments
Legal & General Group PLC (L&G), a major U.K.-based insurer and pension risk transfer provider, has formed a strategic partnership with Blackstone Inc. to enhance its annuities and asset management capabilities. Through this collaboration, L&G will grant clients access to Blackstone’s private credit funds, utilizing Blackstone’s private credit origination platform to diversify investment-grade assets within L&G’s £92 billion annuities business. The insurer plans to allocate up to 10% of its expected new annuity business to these credit opportunities, broadening its investment portfolio and potentially improving asset diversification for its obligations.
L&G’s asset management arm, managing approximately £1.1 trillion in assets, will jointly develop public/private credit solutions combining its fixed-income expertise with Blackstone’s credit offerings. These offerings are positioned to support L&G’s expansion into global wealth management and investment wholesaling sectors, illustrating an integrated approach to asset and liability management.
Blackstone Credit and Insurance (BXCI) manages around $465 billion in assets, including $237 billion linked to insurance clients. It invests across diverse credit strategies including private investment-grade credit, infrastructure debt, and direct lending. The partnership leverages this broad capability to support insurance clients with asset origination, investment opportunity identification, and tailored product development.
This alliance aligns with wider market trends where large alternative asset managers are increasingly acquiring insurance or annuity businesses and managing substantial insurance assets. Notable examples include Apollo’s Athene, KKR’s acquisition of Global Atlantic, and Blue Owl Capital’s expansion through Kuvare. These developments reflect insurers’ growing integration of alternative investments like private credit and equity to diversify beyond traditional fixed-income allocations.
Industry data shows a pronounced shift towards private market investments among insurers. Goldman Sachs Asset Management reports 62% of insurance investors plan to boost private market allocations in 2024, while Mercer’s survey notes that most insurers are now engaging with private markets despite challenges such as liquidity and manager selection complexities.
Legal & General anticipates 2025 to be a record year for pension risk transfer volumes, particularly in the U.S. and Canada, bolstered by a recent £400 million investment from Japanese insurer Meiji Yasuda following its purchase of L&G’s U.S. insurance business. This underscores the growing significance of cross-border capital flows and strategic partnerships in the insurance investment landscape.
Overall, the L&G-Blackstone partnership exemplifies the evolving relationship between insurers and alternative asset managers, reflecting broader industry movements toward innovative credit strategies and integrated investment solutions to meet long-term liability-driven investment requirements.