Insurance is the biggest pool of assets where specialist credit managers are competing to raise capital right now.
In our weekly conversations at Laz Partners with CIOs and other leaders in the credit space, the same theme keeps coming up: Specialist credit managers with long-term track records running multiple strategies (eg. public/private/structured credit) will likely already be managing some insurance capital, while at the same time realising they could be raising significantly more capital from that same base. The issue is that many of these managers lack a clear game plan on what to do.
Much of the gap is packaging. If more of their funds arrived in balance sheet-friendly formats, insurers could hold them at a far lower capital charge and allocate more (or at least more easily). Some credit managers are only monetising 1 or 2 products this way. Others have multiple quick wins available and might not even realise it: eg. a new wrapper around a strategy they already run.
What is missing:
Usually a single specialist hire or a small team. People who can look across the entire fund range and decide which strategies can be structured into insurance-friendly formats, and under which regime, depending on where the firm's clients sit and where the business wants to compete for assets. Sometimes the answer is a rated note feeder. Sometimes it is a new product built for insurers from launch.
Who is ahead:
A handful of specialist credit managers have a real head start. Others are behind, and it is increasingly costing them. Some boutiques and credit hedge funds are beating larger alt/asset managers to insurance allocations in certain strategies. Equally, some very large asset managers lack the alternative credit depth to win large insurance mandates spanning multiple strategies.
What is driving change:
Under the EU reforms, the standard formula charge on a 3-year AAA CLO tranche falls from 37.5% to 8.1% in January 2027. In the US, charges on mezzanine CLO tranches rise from the year-end 2026 filing. Both push insurers towards senior-rated paper. Managers who can manufacture it will see the demand first.
The talent:
The people who do this well come from specialist insurance structuring and solutions teams, and they are deeply technical. They can sit across the table from an insurance CIO and speak the same language. While it is a tight pool, we are fortunate to be deeply entrenched in this market.
Insurance solutions is an area we are passionate about at Laz Partners.
