Northwestern Mutual announced Tuesday that the insurer will buy a minority equity interest in alternative investment manager Sixth Street. In addition, the two firms will form a long-term strategic partnership in which Sixth Street will manage $13 billion of Northwestern Mutual’s more than $320 billion in institutional assets.
Northwestern Mutual’s institutional investment portfolio backs the firm’s insurance and annuity products; the firm has more than $627 billion in total assets across institutional and retail client portfolios and $2.3 trillion in life insurance protections. Sixth Street managed $100 billion in assets, as of September 30, 2024.
“Sixth Street has industry-leading asset origination and investment management capabilities, a proven track record, and a compelling culture, and we look forward to building a mutually beneficial, highly successful long-term partnership,” said Jeb Bentley, Northwestern Mutual’s CIO, in a statement.
Sixth Street will invest Northwestern Mutual’s assets across asset-based finance and opportunistic investments in real estate and infrastructure debt and equity, according to a news release. According to the firms, there is potential for the partnership to scale further in the future.
Insurers have shown a growing appetite for alternative investments, especially private credit. High yields and stable income streams from the asset class are attractive to insurers, as they need consistent cash flows to meet long-term obligations, Mercer noted in a 2023 report.
BlackRock, which recently more than doubled its private credit assets through its acquisition of HPS Investment Partners, noted in its 2024 global insurance report that 91% of surveyed insurance asset managers plan to increase their allocations to private markets over the next two years, with an increasing focus on private credit.
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Tags: insurance, Insurance Asset Management, Jeb Bentley, Northwestern Mutual, Private Credit, Sixth Street