1823 Partners Launches to Enhance Life Insurers’ Control Over Investment Returns

Anant Bhalla, an insurance industry executive and former leader of American Equity Life Insurance, has established 1823 Partners, a private asset investment firm focused on providing life insurers more direct control and value from investment returns on policyholder premiums. This initiative responds to concerns that traditional asset management models, dominated by large private equity firms like Apollo, Blackstone, and KKR, disproportionately benefit asset managers through fees and asset growth rather than insurers themselves, constraining insurer margins and influence.

Bhalla highlights a market shift where life insurers increasingly rely on private capital investments as a funding source, but face diminished returns after fees and reduced control over portfolio outcomes. 1823 Partners aims to realign incentives by eliminating traditional management fees and instead earning compensation only when returns surpass a 6% threshold. The firm focuses on long-duration credit and equity assets that align with insurers’ liabilities, targeting improved net returns for insurer clients.

This launch occurs amid growing industry reliance on third-party asset managers, especially in private credit, despite internal challenges insurers face in replicating private equity investment models. Bhalla notes that attracting investment talent to typical insurance company structures is difficult, as top professionals often prefer investment firm environments.

1823 Partners is backed by JAB Holding Company and plans to manage several billion dollars initially, including investments from Prosperity Life, a U.S. annuity provider being acquired by JAB. The leadership team comprises industry veterans from American Equity Life Insurance, Cerberus Capital, and Citigroup, signaling a blend of insurance and alternative asset management expertise.

This development reflects broader market trends emphasizing alignment of asset management strategies with insurer liabilities and fee structures fostering long-term value for life insurers. It addresses regulatory and operational pressures insurers face in optimizing investment portfolios amid a competitive asset management landscape.