Blackstone Inc. plans to form a new business unit out of its corporate credit, asset-based finance and insurance groups. The new group, named Blackstone Credit & Insurance, will seek to streamline the investment process for clients and will act as a one-stop place for alternatives such as private credit, the firm announced on Wednesday.
Blackstone CEO and Co-Founder Steve Schwarzman has big plans for the new group. “We see the opportunity for BXCI, along with Real Estate Credit, to reach $1 trillion in the next 10 years,” Schwarzman said in a statement from the company. Blackstone in July announced its assets under management topped $1 trillion.
“Exceptional demand from our clients has made Credit and Insurance the fastest-growing segment at Blackstone,” Jon Gray, Blackstone’s president and chief operating officer, said in the statement. “This integration allows us to be an even more effective lender and more comprehensively serve our insurance, pension fund and private wealth clients.”
The move by Blackstone, the largest private equity manager by assets, comes at a time when group and individual annuity sales are hitting record levels in the U.S., and growing numbers of corporate pension plan sponsors are engaging in or considering pension risk transfer transactions to offload some or all of their pension liabilities.
In June, Fidelity formed Soteria Reinsurance Ltd., a Bermuda-based reinsurance firm focused on pension risk transfer. Earlier in September, Prudential Financial Inc. and Warburg Pincus LLC announced the creation of another Bermuda-based life and annuity reinsurance company, Prismic Life Reinsurance Ltd.
Prudential announced in August it completed a $1 billion pension risk transfer deal with utility company PSEG, and in May, AT&T Inc. disclosed it was transferring $8.05 billion in pension assets to insurer Athene Holding Ltd.
The predecessor units of Blackstone’s new group have been the company’s fastest growing. In the last three years, they have collectively doubled their AUM to $295 billion, the firm reported. Blackstone’s insurance assets alone have tripled since 2020.
The firm also announced several promotions related to the formation of ‘BXCI,’ its shorthand for the group. Gillas Dellaert, global head of insurance solutions, will be promoted to global head of BXCI. Dwight Scott, global head of credit, will be promoted to chairman of BXCI. Jonathan Pollack, global head of structured finance, will become global head of real estate credit.
“I am excited to take on this new role and believe that there is immense white space to continue expanding our leading credit and insurance platforms,” Dellaert said in the statement. “Bringing together nearly all of the firm’s credit activities further extends the competitive advantage of Blackstone’s scale, private origination capabilities, and intellectual capital—helping us better serve our clients.”
“The combined BXCI team will deliver the best of Blackstone to our investors and borrowers,” Scott said in the statement. “We believe we are still in the early innings of a megatrend in private credit. Particularly in today’s elevated base rate environment—and given the senior-secured structure of many of our products—we believe it is currently the best risk-adjusted environment for this asset class in decades.”