U.S. insurance companies are increasing their private asset allocations, including infrastructure and real estate equities, according to a report published Wednesday by SLC Management, the institutional asset management business of Sun Life Financial Inc.
“Infrastructure has been a popular choice for institutional investors in Europe and the U.K. for many years,” said Michael Straka, head of capital formation at InfraRed Capital Partners, one of the asset manager’s brands, in a media release. “[W]e’re not surprised to see that insurers in the U.S. are planning to catch up.”
Conducted this spring, SLC Management’s 2025 Insurance Asset Management Survey found that 58% of insurers are planning to increase their private infrastructure equity holdings. About the same amount (57%) will grow their investment-grade private credit allocations. And 50% will invest more in private real estate equity.
The study’s sample included 250 insurers in the U.S., Europe, Canada and Bermuda. It covers the life, health, reinsurance, specialty and property-and-casualty sectors.
More than nine in 10 insurance companies surveyed (92%) reported that they’re seeking increased total return over the next two years.
“With insurers increasingly prioritizing total return over yield within their investment portfolios, it makes sense that allocations will continue to shift to private assets over the next two years,” said Brett Lousararian, head of SLC Management’s global insurance group, in the release. “We expect to see insurers increasing exposure to alternative asset classes like infrastructure equity and real estate equity for further diversification and return enhancement.”
Among Canadian insurers, nearly nine in 10 (88%) said they’re emphasizing total return, and 56% said they plan to increase private infrastructure equity, investment-grade private credit and private real estate equity allocations.