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Brookfield’s $200 Billion Credit score Group Seeks to Lure Insurers

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Brookfield Asset Administration’s newly shaped credit score arm will cater to its mum or dad’s insurance coverage enterprise and also will pitch different insurers on overseeing their belongings, the unit’s chief government officer says.

“What we’ve determined to do is deliver all of our credit score actions beneath one umbrella, permitting for elevated focus and extra progress,” mentioned Craig Noble, who was not too long ago named to steer that effort.

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Brookfield Asset expects credit score to be its quickest rising enterprise, greater than tripling in measurement over the subsequent 5 years. The Toronto-based agency is partly counting on credit score — together with its insurance coverage platform — to succeed in $1 trillion of fee-bearing belongings by 2028, up from $457 billion on the finish of final yr.

Brookfield Reinsurance Ltd., a separate publicly traded entity that’s managed by mum or dad Brookfield Corp., is poised to finish its acquisition of American Fairness Funding Life Holding Co. in coming weeks, doubling its insurance coverage belongings to about $100 billion. Noble’s workforce will handle the vast majority of that cash.

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Noble’s credit score unit oversees $200 billion in complete, together with Brookfield’s infrastructure and actual property lending funds, in addition to partnerships with Oaktree Capital Administration, European credit score supervisor LCM Companions, Main Wave and 17Capital.

“One in every of our progress areas is to handle bigger parts of stability sheets for insurance coverage corporations and different establishments,” Noble mentioned, including that the unit has been doing that for Brookfield Re and, more and more, for third-party insurance coverage corporations.

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The unit’s funding methods additionally embrace “insurance coverage options” reminiscent of investment-grade debt, structured finance and asset-backed financing, Noble mentioned. However personal credit score and direct lending stay the largest a part of the enterprise, comprising 80% of fee-revenue final yr.

Various-asset managers have been pushing into areas past conventional buyouts after rising rates of interest made borrowing costlier. That has contributed to a stampede towards personal credit score, which jumped in to fill a lending void as conventional banks retrenched. Personal fairness corporations have additionally been buying stakes in insurers to affect how they make investments and develop their stability sheets.

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{Photograph}: The Brookfield Asset Administration brand on a smartphone organized in New York, US, on Wednesday, Nov. 8, 2023. Picture credit score: Gabby Jones/Bloomberg

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