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 senior lending, asset-based finance, liquid credit, structured product, and mortgages — 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 Asset Management 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. 42 Asset Management is a trusted partner in modern insurance asset management.

Specialized Insurance Investment Solutions

42 Asset Management delivers highly specialized investment strategies tailored for the nuanced needs of annuity-focused insurance portfolios, including outsourced asset management, reinsurance transactions, investment grade senior lending, and equity opportunities, all designed to optimize balance sheet efficiency and deliver superior returns.

Outsourced Asset Management Solutions

Specialized investment strategies designed for life and annuity products and reinsurance capital, focusing on liability matching, capital efficiency, and long-term stable returns.

  • Duration-matched fixed income portfolios
  • Capital-efficient alternative investments
  • Strategic asset allocation for long-term liabilities

Reinsurance Transactions

Experts in the execution of complex reinsurance transactions to provide capital relief and diversification for our insruance partners within the annuity sector.

  • Structured reinsurance design and capitalization
  • Fronting and retrocession solutions
  • Asset-aligned reinsurance execution

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.

  • Senior term loans to creditworthy middle market companies
  • Conservative leverage targets and strong covenants
  • Enhanced yields with favorable regulatory capital treatment

Rated Note Feeder Equity

Access to diversified strategy in structured rated notes. Offers enhanced income streams and capital appreciation potential, providing valuable diversification for investors.

  • Customized structured note opportunities
  • Leveraged equity investments in a stable loan portfolio
  • 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.

1
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
2
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
3
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
4
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.