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Legal & General Group PLC on Thursday announced a private credit partnership agreement with Blackstone Inc that it said will help address growing demand for public-private hybrid investment products.
The London-based insurer said the partnership will combine the ‘strength of L&G and Blackstone’s respective credit platforms to enhance L&G’s competitive advantage in annuities and bolster its asset management proposition in key geographies and channels.’
Blackstone is a private-equity focused investment management company based in New York.
L&G Chief Executive Antonio Simoes said: ‘Today’s announcement marks another important step in delivering our strategy for focused, sustainable growth and enhanced shareholder returns.’
In response, shares in L&G were up 0.9% at 253.20 pence in London on Thursday. Blackstone closed up 1.5% at $158.68 in New York on Wednesday.
L&G’s Simoes said the partnership cements ‘our market leading position in pension risk transfer, and enable us to address growing demand for public-private hybrid investment products. 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.’
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.
The partnership will ‘complement’ L&G’s existing capabilities to gain ‘competitive advantage, enhanced returns, and support its growth ambitions,’ the company said in a statement.
L&G said it will invest up to 10% of anticipated annuities new business flows.
This will add to the $237 billion in third-party insurance assets Blackstone manages across investment-grade private credit, liquid credit, and other strategies.
Additionally, 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 will accelerate L&G’s ambitions to expand into global wealth and wholesale channels, the firm explained.
The partnership combines L&G’s ‘leading’ positions in pension risk transfer and asset management comprising a $122.5 billion annuities book and $1.4 trillion in assets under management with Blackstone’s $465 billion credit platform.
Blackstone Chief Operating Officer Jon Gray said: ‘Together, our two firms’ unmatched scale and expertise should drive innovative solutions in the private credit market.’
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