Another day, another partnership between private credit leaders and insurance companies looking to get into the space.
The WSJ this morning reported that Sixth Street is going to manage $13B of mostly ABS for Northwestern Mutual, kicking of 2025 as a continuation of the many tie ups forged in 2024. In return, Northwestern will take a minority stake in Sixth Street (which last year bought back 10% from TPG). And there is no stopping in sight, as everyone from smaller insurance companies all the way up to Blackrock are trying to get into private credit.
San Francisco based Sixth Street was founded 15 years ago and now is hitting the $100 billion AUM mark.
Investment management behemoth Capital with its $2.6 trillion in AUM announced a partnership with KKR for new ways to bring alternatives into investor portfolios. KKR manages $500 billion, $200 billion of which in credit.
The two firms plan to make hybrid public-private markets investment solutions available to mass affluent investors across asset classes, geographies and channels, starting in the US in 2025. The first strategies will have 60% in Capital chosen public bonds, and 40% in KKR direct and asset-based loans.
Capital CEO Mike Gitlin said “we believe in combining our respective areas of expertise in strategies that are more liquid than standalone private credit.” And Co-CEOs Joe Bae and Scott Nuttall added “we believe individuals should have access to alternative investments and are thrilled to be partnering with Capital Group, which has world-class investment capabilities, strong client relationships and a leading sales and distribution network.”
Matt O’Conor, President of Capital’s Client Group, mentioned “financial professionals tell us that we can add more value by bringing a fuller set of solutions to their clients’ portfolios and are looking to us to be their partner.” Capital has always been strong in distribution for RIAs and financial intermediaries, and KKR should be able to benefit from those inroads as HNW clients are looking to get into private markets. Gitlin stated that out of 290,000 US FAs, some 220,000 have Capital products.
While other long-term focused asset managers such as neighbor Franklin Templeton have focused on acquiring alternatives managers, Capital Group is going the partnership route. The WSJ reported that Capital according to Gitlin spent about two years trying to figure out how to get into alternatives and private credit.
May the games continue.
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Our proprietary database IMD tracks companies, products and talent across global private markets (www.InvestmentManagementData.com
The WSJ reported that Aflac is paying about $100 million for a 40% stake in Tree Line Capital Partners, bought from Tree Line management and its PE backer, Stone Point Capital, alongside a multi-year commitment to help the firm with investable cash.
Tree Line Capital was founded in 2014 with a focus on lower middle market lending via first lien term loans, unitranche term loans, and equity co-investments. The firm has issued over $5 billion in commitments to 361 companies and has $2.7 billion in assets under management.
Tom Quimby is a founding and managing partner that credits GE Capital for his solid foundation in credit.
Aflac, as many other insurance companies, liked the returns that private credit boutiques have been generating. And the WSJ points towards the blurring lines of demarcation between global alt asset managers and big insurance companies.
Alt asset managers have gobbled up insurers, and insurers are putting their general account money into private credit.
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Our proprietary database IMD tracks companies, products and talent across global private markets (www.InvestmentManagementData.com
These partnerships just seem to keep happening faster and faster: niche private credit managers teaming up with large global asset manager for a win-win partnership.
Brookfield is investing $1.5 billion in capital, which includes capital into Castlelake’s investment strategies by Brookfield Reinsurance. Brookfield Asset Management has some $900 billion in AUM, and has focused on the $300 billion Brookfield Credit business in recent years. The business integrates Brookfield’s credit capabilities with its partnerships including Oaktree Capital Management, LCM Capital Management, 17Capital and other affiliated managers.
Castlelake was founded in 2005 by Rory O’Neill and Evan Carruthers around asset-based investments, and the firm manages some $22 billion of AUM for about 200 institutional investors. The strategies include aviation, specialty finance and real assets.
O’Neill and Carruthers in a joint statement said: “In Brookfield, we believe we have found a like-minded partner… to grow and evolve Castlelake into one of the foremost asset-based investment firms in the market.” The company and its senior leadership will continue to operate its business independently.
Brookfield only recently formed its credit arm to drive growth alongside its real estate and infra businesses. As everyone else, they would like to manage more credit assets on behalf of third-party insurers. Brookfield expects credit to be its fastest growing business.
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Our proprietary database IMD tracks companies, products and talent across global private markets (www.InvestmentManagementData.com
BNY Mellon and CIFC have been working together for a decade, but a month ago expanded the partnership into private credit, to provide access to CIFC’s US direct lending strategy and to enhance product offerings specifically for US private markets.
In return, CIFC gets access to BNY’s investor relationship and capital pools, especially for “the next stage of international growth.”
CIFC, an alternative credit specialist, was founded in 2005 and has some $41 billion in assets across CLOs, corporate, structured, opportunistic credit and direct lending strategies.
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Our proprietary database IMD tracks companies, products and talent across global private markets (www.InvestmentManagementData.com
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