Legal & General (L&G) and Blackstone have partnered to combine their respective credit platforms to enhance L&G’s competitive advantage in pension annuities and bolster its asset management position in key geographies and channels.
The partnership combines L&G’s leading positions in pension risk transfer and asset management – comprising a £92bn annuities book and £1.1trn in assets under management – with the strength and scale of Blackstone’s $465 billion credit platform.
As part of the partnership, L&G’s asset management business will develop public/private hybrid credit solutions that combine Blackstone’s private credit platform with L&G’s active fixed income capabilities. This, according to L&G, will accelerate the firm’s ambition to expand into highly attractive global wealth and wholesale channels.
Additionally, L&G’s annuities business will leverage Blackstone’s private credit origination platform to access a pipeline of diversified investment-grade assets, predominantly from the US. This partnership, L&G said, will complement its existing capabilities to gain a competitive advantage, enhanced returns, and support its growth ambition.
L&G added that it will invest up to 10% of anticipated annuities in new business flow, which will add to the $237bn in third-party insurance assets Blackstone manages across investment-grade private credit, liquid credit, and other strategies.
Eric Adler, L&G’s chief executive officer for asset management, said: “In June, we set out our vision as a leading global investor innovating to solve client challenges, using the power of L&G. This partnership brings together the combined strengths of L&G and Blackstone’s respective credit businesses, to offer new, innovative investment solutions and extend our international reach.”
In particular, Adler said he was excited about the potential of the alliance to advance L&G’s proposition in global wealth and wholesale channels, and “deepen the capabilities we can draw upon to support our institutional clients”.
António Simões, L&G’s group CEO, added that the announcement marks an important step in delivering L&G’s strategy for focused, sustainable growth and enhanced shareholder returns.
“Complementing L&G’s own insurance, investment and asset origination capabilities, our partnership with Blackstone will further cement our market-leading position in pension risk transfer, and enable us to address growing demand for public-private hybrid investment products,” he said.
“L&G will benefit from a more diverse pipeline of assets for our annuity book, and growth in asset management as we develop more sophisticated investment solutions for clients around the world,” Simões added.
Philip Sherrill, global head of insurance at Blackstone, said the partnership shows the best that Blackstone can offer to insurance company clients.
“The breadth of our capabilities allows us to support our partners across their businesses – originating assets, working together to identify investment opportunities, and designing products that meet the needs of both institutional clients and individual investors,” he noted.
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