Lincoln Financial's Jayson Bronchetti - the role of insurance companies in private markets
Welcome back to the Alt Goes Mainstream podcast.
Today’s episode is with the CIO of an insurance company responsible for more than $300B in assets and a major focus on private markets.
Lincoln Financial EVP and CIO Jayson Bronchetti and I sat down recently at Lincon Financial’s headquarters in Radnor, Pennsylvania to discuss the increasing involvement of insurance companies in private markets.
Jayson, who is a member of Lincoln Financial’s Senior Management Committee and serves as the primary investment officer to Lincoln’s Board of Directors on all investment-related matters, is responsible for more than $300B in assets across the general account portfolio and the separate account mutual fund complex. He’s also chairman of the board of directors of the Lincoln Variable Insurance Product Trust family of over 100 mutual funds. He's also on the board of the Lincoln Financial Foundation.
Fresh off recent partnerships with Bain Capital and Partners Group on private markets investment products and Bain Capital taking a stake in Lincoln’s business, Jayson and I had a fascinating conversation about how insurance companies can approach private markets and how they can build unique and differentiated partnerships with asset managers.
We discussed:
- The evolving role of insurance companies as LPs in private markets.
- Why asset and liability matching is a critical framework to allocating to private markets.
- How the general account of an insurance company creates interesting opportunities for strategic relationships and partnerships with alternative asset managers.
- The benefit of having a business that works with financial advisors and individuals.
- The importance of educating wholesalers about private markets – and why insurance wholesalers might have an advantage in educating advisors and clients about private markets products and strategies.
Thanks Jayson for coming on the show to share your wisdom and expertise about private markets and insurance.
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A word from AGM podcast sponsor, Ultimus Fund Solutions
Subscribe to Alt Goes Mainstream to receive the weekly newsletter every Sunday and all of AGM’s podcasts.
A word from AGM podcast sponsor, Ultimus Fund Solutions
This episode of Alt Goes Mainstream is brought to you by Ultimus Fund Solutions, a leading full-service fund administrator for asset managers in private and public markets. As private markets continue to move into the mainstream, the industry requires infrastructure solutions that help funds and investors keep pace. In an increasingly sophisticated financial marketplace, investment managers must navigate a growing array of challenges: elaborate fund structures, specialized strategies, evolving compliance requirements, a growing need for sophisticated reporting, and intensifying demands for transparency.
To assist with these challenging opportunities, more and more fund sponsors and asset managers are turning to Ultimus, a leading service provider that blends high tech and high touch in unique and customized fund administration and middle office solutions for a diverse and growing universe of over 450 clients and 1,800 funds, representing $500 billion assets under administration, all handled by a team of over 1,000 professionals. Ultimus offers a wide range of capabilities across registered funds, private funds and public plans, as well as outsourced middle office services. Delivering operational excellence, Ultimus helps firms manage the ever-changing regulatory environment while meeting the needs of their institutional and retail investors. Ultimus provides comprehensive operational support and fund governance services to help managers successfully launch retail alternative products.
To assist with these challenging opportunities, more and more fund sponsors and asset managers are turning to Ultimus, a leading service provider that blends high tech and high touch in unique and customized fund administration and middle office solutions for a diverse and growing universe of over 450 clients and 1,800 funds, representing $500 billion assets under administration, all handled by a team of over 1,000 professionals. Ultimus offers a wide range of capabilities across registered funds, private funds and public plans, as well as outsourced middle office services. Delivering operational excellence, Ultimus helps firms manage the ever-changing regulatory environment while meeting the needs of their institutional and retail investors. Ultimus provides comprehensive operational support and fund governance services to help managers successfully launch retail alternative products.
Visit www.ultimusfundsolutions.com to learn more about Ultimus’ technology enhanced services and solutions or contact Ultimus Executive Vice President of Business Development Gary Harris on email at gharris@ultimusfundsolutions.com.
We thank Ultimus for their support of alts going mainstream.
02:20 Sponsor Message: Ultimus Fund Solutions
03:37 Welcome to the Podcast
04:03 Jayson's Background in Private Markets
04:57 Evolution of Insurance Companies in Private Markets
06:37 Symbiotic Relationship Between GPs and Insurers
08:40 Understanding Liquidity and Illiquidity
11:19 Diligencing Private Markets Managers
13:25 Balancing Scale and Performance
14:09 Boots on the Ground: Sourcing Edge
14:42 Evolution of Alternative Asset Managers
14:53 Lincoln's Unique Position in the Market
19:32 Strategic Partnerships with Bain and Partners Group
20:03 The Value of Distribution Relationships
22:14 The Democratization of Alternative Investments
22:49 The Intersection of Private Markets, Wealth, and Insurance
23:10 Approaching Private Markets with the General Account
24:18 Launching Strategies with Bain and Partners Group
24:50 Incubating New Strategies for Retail Consumers
25:16 Building a Customized Investment Strategy
25:45 Designing Purposeful Investment Funds
26:00 Ensuring Accessibility and Proper Wrappers
26:08 Liquidity and Product Matching
26:15 Seeding Strategies with the General Account
26:58 One Lincoln Approach
27:12 Finding Opportunities in the Seams
27:46 Balancing General Account and Distribution Needs
28:07 Product Innovation in the Wealth Channel
28:53 Healthy Tension in Product Design
31:51 Importance of Asset Liability Management
33:05 Educating the Distribution Team
34:47 Training Modules for Wholesalers
36:28 Boots on the Ground: The Power of Relationships
37:45 Simplifying Complex Products
40:44 Democratizing Alternative Investments
41:10 Straddling Institutional and Individual Mindsets
41:35 Integrating Private Markets into Retirement Products
43:13 Future of Private Markets in Retirement Portfolios
43:57 Product Innovation and Technology
45:15 Private Markets in Insurance Products
47:16 Focus on Private Credit
49:38 Risks in Private Credit
50:29 Excitement for the Future of Private Markets
51:01 Conclusion and Final Thoughts
Disclosure from Lincoln Financial
Registration statements for each of the evergreen funds have been filed with the Securities and Exchange Commission and are available from the EDGAR database on the SEC's website (www.sec.gov). The information in the registration statements is not complete and may be changed. The securities of neither fund may be sold until its registration statement is effective. An investor should consider the investment objectives, risks, charges and expenses of each fund carefully before investing. This and other information about each fund will be contained in the fund's final prospectus, which investors should read carefully when available from the EDGAR database on the SEC's website (www.sec.gov). This communication is not an offer to sell the shares of either fund and is not soliciting an offer to buy the shares of either fund in any state where the offer or sale is not permitted.
Investing in the funds involves risks, including the risk that a shareholder may lose a part or all of their investment. Limited liquidity will only be provided to shareholders through periodic repurchase offers as described in the funds’ prospectuses, and there is no guarantee that investors will be able to sell all the shares they desire to sell in any repurchase offer conducted. Portfolio diversification does not ensure a profit or protect against a loss.
Lincoln Financial is the marketing name for Lincoln National Corporation, its insurance companies and broker/dealer affiliate Lincoln Financial Distributors, Inc. Affiliates are separately responsible for their own financial and contractual obligations. Bain Capital and Partners Group are not affiliated with Lincoln Financial.
Editing and post-production work for this episode was provided by The Podcast Consultant.