Blackstone has appointed a new leader for its insurance solutions business – a part of the asset manager that executive vice-chairman Tony James once said had “the clear potential to be our single largest business group” by AUM, as reported by sister title Private Equity International.
Gilles Dellaert, former co-president and chief investment officer of retirement and life insurance company Global Atlantic, is taking over the role of global head of Blackstone Insurance Solutions on 1 April and will be based in New York. The BIS platform will operate under David Blitzer, who heads the firm’s Tactical Opportunities business.
BIS was formed in 2018 and was originally led by Chris Blunt, the former president of New York Life’s investments group, who left at the end of that year to take up a role as president and chief executive at annuity provider Fidelity and Guaranty Life, BIS’s largest client, which Blackstone acquired in May 2017.
Martin Alderson-Smith, BIS’s chief operating officer, has been running day-to-day operations in the interim.
Blackstone’s all-cash transaction acquiring FGL valued the business at $1.8 billion and was backed by Blackstone Tactical Opportunities; Blackstone’s credit arm, GSO Capital Partners; and a special purpose acquisition company called CF Corporation, founded by former Blackstone dealmaker Chinh Chu and William Foley, who had spent more than 30 years at insurance company Fidelity National Financial, as Private Equity International reported at the time.
Speaking at the Blackstone Investor Day at the Plaza Hotel in New York in September 2018, James said severe pressure from increasing regulatory capital requirements and “zero interest rates” meant insurers had “no choice but to move into alternative assets and into private credit where they can get more yield for the same risk”.
“They are also being forced to sell books of business and re-deploy the balance sheets into areas where they can grow.”
Blackstone is not only “ideally positioned” to help with the alternatives portion but has become the largest originator of credit assets in the world, for which it doesn’t currently have a pocket, James said.
As well as managing the alternatives portfolios for these insurance companies, Blackstone has the opportunity to raise third-party money in permanent capital vehicles to buy the books of businesses, James added.
BIS manages more than $60 billion in assets for insurance companies. Its investment products are tailored to each individual insurer’s needs to help drive higher performance, faster growth, better capital efficiency and increased returns on equity, Blackstone said in a statement. Blackstone has $554 billion in assets under management.