Insurance Solutions
42 Asset Management Strategy Overview
Insurance Solutions Strategy Overview
42 Asset Management delivers a specialized, insurance-focused investment platform built to meet the evolving needs of the life and annuity market. The firm employs a fixed-income and relative-value approach across private credit, asset-based finance, reinsurance, and select private equity opportunities—targeting investment-grade assets that enhance yield and capital efficiency for insurers.
By combining disciplined underwriting with asset-class agnostic flexibility and partnerships across more than 60 institutional managers, 42 AM delivers tailored, scalable solutions that drive portfolio diversification and optimized returns. Founded by seasoned industry veterans, the firm’s strategy is rooted in integrity, precision, and performance—positioning 42 Asset Management as a trusted partner in modern insurance asset management.
Decades of Experience
The founding partners and senior leadership bring over 75 years of combined experience across private credit, reinsurance, and institutional asset management. Having successfully navigated multiple market cycles, the team applies a disciplined, data-driven approach to underwriting and portfolio construction—balancing risk, liquidity, and return to deliver durable, long-term value for investors.
Proven Execution and Performance Culture
42 AM’s leadership team has a demonstrated history of building and scaling multi-billion-dollar investment platforms, delivering consistent performance across private credit and reinsurance markets. The firm operates with a performance-driven culture rooted in accountability, alignment, and excellence—ensuring every investment is executed with precision and purpose to create lasting value for investors.
Insurance-Focused Platform with Institutional Discipline
42 Asset Management is purpose-built for the life and annuity market—bringing institutional-grade investment management to a segment historically underserved by larger firms. The platform’s exclusive focus on insurance ensures strategies are optimized for balance sheet efficiency, regulatory capital treatment, and long-duration liability matching.
Integrated Origination and Partnership Model
Through internally originated private credit and asset-based finance opportunities, complemented by partnerships with over 60 institutional managers, 42 AM provides investors with direct access to proprietary deal flow and enhanced yield opportunities. This dual-channel approach drives consistency, diversification, and lower fee drag across market cycles.
Specialized Insurance Investment Solutions
42 Asset Management delivers highly specialized investment strategies tailored for the nuanced needs of annuity and reinsurance portfolios, strategic transactions, and targeted credit and equity opportunities, all designed to optimize balance sheet efficiency and deliver superior returns.
Annuity & Reinsurance Solutions
Specialized investment strategies designed for annuity products and reinsurance capital, focusing on liability matching, capital efficiency, and long-term stable returns. We address unique regulatory and solvency requirements.
- Duration-matched fixed income portfolios
- Capital-efficient alternative investments
- Strategic asset allocation for long-term liabilities
Strategic Transaction Management
Expert advisory and execution for complex investment and capital transactions within the insurance sector. We provide end-to-end support for portfolio acquisitions, dispositions, and structural adjustments.
- M&A due diligence and integration support
- Portfolio divestitures and transfers
- Special situations and distressed asset management
Investment Grade Senior Loans
Origination and management of high-quality, investment-grade senior loan portfolios. These provide attractive yields with robust credit profiles and strong structural protections suitable for insurance balance sheets.
- Direct lending to creditworthy corporations
- Conservative leverage targets and strong covenants
- Enhanced yields with favorable regulatory capital treatment
Rate Note & Preferred Equity
Access to diversified strategies in structured rate notes and preferred equity. These solutions offer enhanced income streams and capital appreciation potential, providing valuable diversification for insurance investors.
- Customized structured note opportunities
- Preferred equity investments in stable companies
- Optimized for yield and portfolio diversification
Integrated Origination & Partnership Model
Proprietary Deal Flow Advantage
42 Asset Management's competitive differentiation stems from our integrated origination platform that combines direct sourcing capabilities with strategic co-lending partnerships. This dual-channel approach ensures consistent deal flow, enhanced pricing, and superior risk-adjusted returns for our insurance clients.
Direct Origination Excellence
Our internal origination capabilities through 42 Private Credit and 42 Asset-Based Finance provide proprietary investment opportunities with favorable economics. By originating deals directly, we control underwriting standards, structure transactions to insurance specifications, and capture additional yield that would otherwise accrue to intermediaries.
This direct origination channel also strengthens our co-lending partnerships. Our ability to reciprocate origination opportunities reduces fees charged by credit partners and increases our access to their best opportunities, creating a virtuous cycle of deal flow and relationship depth.
Rigorous Underwriting
Every potential investment undergoes comprehensive due diligence focused on insurance-relevant metrics: leverage ratios, debt service coverage, asset-base protection, and cash flow stability.
Strategic Partnerships
Our network of 60+ credit partners provides supplemental deal flow and market intelligence. These relationships, built over decades, give us access to institutional-quality opportunities typically unavailable to smaller insurance investors.
Insurance-First Structuring
All investments are structured with insurance balance sheets in mind: appropriate maturities for liability matching, covenant packages for downside protection, and documentation supporting favorable RBC treatment.
Investment Evaluation Framework
Our investment committee applies a rigorous, insurance-focused framework to evaluate every opportunity. We assess deals across multiple dimensions to ensure they meet our standards for credit quality, structural protection, and portfolio fit.
Credit Quality Assessment
- Leverage Analysis: Target total leverage below 4.0x with senior leverage typically under 3.0x
- Cash Flow Stability: Strong, predictable levered free cash flow with DSCR exceeding 1.5x
- Business Quality: Mission-critical products/services with long-term contracted or recurring revenue
- Market Position: Leading positions in attractive, growing end markets with defensible competitive moats
Structural Protection
- Asset Coverage: Strong asset-based downside protection with tangible collateral value
- Covenant Package: Comprehensive financial maintenance and negative covenants tailored to risk profile
- Documentation: Institutional-quality legal documentation with appropriate creditor protections
- Maturity Profile: 5-7 year terms with prepayment protections and call premiums
Insurance Optimization
- RBC Efficiency: Structures designed to minimize risk-based capital charges while maximizing returns
- Regulatory Treatment: Investments qualify for appropriate NAIC designation and statutory accounting
- Liquidity Profile: Appropriate liquidity characteristics aligned with insurance liability needs
- Duration Matching: Maturities that complement overall portfolio duration objectives
Portfolio Construction
- Diversification: Appropriate exposure limits by issuer, industry sector, and geography
- Correlation Analysis: Assessment of portfolio-level concentration and correlation risks
- Yield Enhancement: Target yields 200-400 basis points above comparable public alternatives
- Risk-Adjusted Returns: Focus on Sharpe ratio optimization and downside protection
Sector Focus
We concentrate our origination efforts in sectors where we have deep expertise and proven track records: Business Services, Financial Services, Industrials, Aerospace & Defense, Digital Infrastructure, and Mission-Critical Outsourcing. This focused approach allows us to develop superior market intelligence and origination capabilities.
Risk Management Philosophy
Our risk management approach prioritizes capital preservation while pursuing enhanced yields. We actively avoid companies in distressed situations, highly cyclical businesses, those with significant customer concentration, or companies requiring substantial maintenance capital expenditures. Instead, we target businesses with contractual, long-term revenue streams and strong asset bases that provide downside protection.
Middle Market Advantage
The middle market insurance segment represents an underserved opportunity where 42 Asset Management delivers outsized value. Traditional asset managers often lack the insurance expertise and flexible mandate required to optimize returns for this segment. Our specialized focus allows us to provide enhanced yields through proprietary origination while maintaining the risk controls and regulatory awareness essential for insurance investors.
CORE INSURANCE FOCUS
Annuity Insurance and Reinsurance Transactions
INSURANCE SOLUTIONS
Investment Grade Senior Loans
Rate Note Feed Equity