Private Credit - Further Developments

Background

There have been two successful working parties exploring the development of the private credit market covered under the Life Insurance and Finance & Investment Boards:

• Private Credit Investment for Insurers – Meeting the Regulatory Requirements Working Party
• Asset Liability Management (ALM) – Non Traditional Assets

The key outputs of these working parties were:

• Observations of industry practice, designed to provoke ideas for best practice amongst insurers
• An “encyclopaedia” of private credit, considering a number of different asset classes and their application to insurers and pension schemes.

Planned objectives:

Investment in private credit continues to increase across the insurance market and within pension schemes. As such, this working party is expected to pick up where these working parties left off and fill in some of the gaps.

For further information, please see Terms of reference.

Next steps:

The working party has established two sub-groups: one covering managing the assets through a workout, the other one focusing on sub-IG assets, which were not research previously. The working party will also provide its thoughts on CP23/19, as it specifically targets illiquid credit assets.

Outputs:

• The effect of Covid-19 on Private Real Estate Debt, May 2020
   
• Survey addressed to professionals originating and/or managing CRE and infrastructure debt assets for insurers.
   
• The impact of Covid-19 on infrastructure debt, November 2020
   
• Consultation: IFoA response to the CP23/19 consultation, December 2019