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

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.

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.

Show Notes
00:40 Introduction to Jayson Bronchetti

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 t...