Blackstone/Resolution Life is latest insurance tie-up

The global alternative asset firm looks to manage up to $60bn of the global insurer's portfolio within six years.

In the latest example of a big credit manager teaming up with an insurance company, Blackstone has reached an agreement with Resolution Life to manage as much as $60 billion of the global life insurance group’s investments in the next six years.

In the first year of the partnership, Blackstone will manage up to $25 billion of Resolution Life’s portfolio assets. This will grow to $60 billion over the next six years.

The assets Blackstone managers will include directly originated assets across private credit, real estate and asset-based finance markets. The arrangement is subject to regulatory approval. The parties expect it to close in the second half of 2023, according to a joint statement.

Blackstone will invest $500 million in Resolution Life as equity capital. It will also assist Resolution Life in raising another $2.5 billion through a new perpetual capital vehicle. Further, Blackstone will serve as the general partner of that vehicle. These fundraisings will bring Resolution’s total capital base above $8 billion.

Nippon Life, a Japanese institution noted for direct infrastructure loans, is the largest existing investor in Resolution Life. Nippon said it welcomed the strategic partnership between Resolution Life and Blackstone.

Private credit is an increasingly large part of Blackstone’s asset management. Blackstone is the largest asset manager in the world, with $941 billion in AUM, according to its website. In 2021, Blackstone Credit participated in 19 direct lending deals of over $1 billion each, including a direct loan of $1.7 billion to Inovalen, a provider of healthcare data and analytics software. Blackstone led the $3.3 billion private debt financing transaction, one of the largest in history.

Gilles Dellaert, the global head of Blackstone Insurance Solutions, said: “We believe that Blackstone’s world-class private credit and asset origination platform and Resolution Life’s leading position in the closed book consolidation market will be a powerful combination.”

He added that Blackstone expects to assist Resolution Life “drive their growth and deliver greater financial security for policyholders”.

Early this year, in a separate instance of the synergy between credit managers and insurers, Apollo Global, another private equity giant that doubles as one of the world’s largest corporate credit investors, acquired insurer Athene Holding in an all-stock deal.