U.S. Insurers to Boost Private Infrastructure Equity Allocations: Survey

U.S. Insurers to Boost Private Infrastructure Equity Allocations: Survey

New study reveals growing appetite in portfolios for alternative assets as insurers' hunt for yield and total return

WELLESLEY, Mass., Oct. 30, 2025 /CNW/ - SLC Management, the US$300B (C$408B) institutional fixed income and alternatives asset manager, today released findings from its first annual 2025 Insurance Asset Management Survey, revealing a striking picture of where portfolio allocations for insurers are headed.

Key highlights from the report include:

• 92% of insurers prioritize increasing total return over the next two years
• 58% aim to boost private infrastructure equity investments
• 57% plan to increase allocation to investment grade private credit
• 50% intend to increase private real estate equity allocations

With return, income and diversification being cited as top priorities for insurers over the next two years, private asset classes are increasingly driving portfolio shifts, according to the report. Most notably, the survey shows that while public market investments continue to form the core of insurer portfolios, private asset classes are increasingly driving major allocation shifts, with insurers expanding beyond private credit to alternative asset classes like infrastructure and real estate equity.

"Infrastructure has been a popular choice for institutional investors in Europe and the U.K. for many years, and we're not surprised to see that insurers in the U.S. are planning to catch up," said Michael Straka, Head of Capital Formation at InfraRed Capital Partners. "With robust earnings growth across transport, energy and digital infrastructure, underpinned by the ability of the asset class to recover inflation, we expect to see an increased demand for infrastructure in mature markets over the coming years." 

Additionally, 92% of insurers cite increasing total return as a priority over the next two years, a departure from historical norms, with more making this a top priority over achieving higher yield.

"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. "We expect to see insurers increasing exposure to alternative asset classes like infrastructure equity and real estate equity for further diversification and return enhancement."

Other key trends from the report include:

Balancing Quality and Diversification in Private Credit
Investment grade private credit (IGPC) has gained popularity among insurers for its capital-efficient yields. Treated similarly to public corporate debt, IGPC can offer enhanced portfolio yields at comparable capital charges. This trend is significant, with 58% of insurers recently increasing IGPC allocations and 97% planning to maintain or increase allocations in the near future.

The Turn to Real Assets for Further Growth
Insurers are increasingly turning to real assets like private infrastructure equity and private real estate equity for growth opportunities. A majority (58%) plan to increase allocations to private infrastructure equity, while half intend to do the same for private real estate equity in the next two years. Most surprisingly, U.S. insurers plan to increase infrastructure equity allocations at the same rate as EU counterparts, a significant change from previous years. This shift is driven by factors including catching up on historically under-allocated portfolios, attractive return potential from core plus and value add strategies, underperformance in traditional alternatives, and new opportunities in emerging markets and sectors like digital infrastructure.

Going Against the Grain: Smaller Insurers Want More Managers
About a third of insurance investors plan to increase their number of external asset managers, with smaller insurers and health insurers most likely to expand their roster. This trend contrasts with the recent industry pattern of manager consolidation.

Smaller insurers, often under-allocated to alternatives and private assets, are nearly twice as likely as larger insurers to add external managers (38% vs. 20%). This shift is driven by a desire to diversify into investment grade private credit (IGPC) and alternative assets like private credit, infrastructure equity, and private equity.

About the SLC Management 2025 Insurance Asset Management Survey
The SLC Management 2025 Insurance Asset Management Survey tracked data from 250 insurance asset management leaders spanning over 9 markets. These respondents were independently sourced and interviewed in April and May 2025.

About SLC Management
SLC Management is a global asset manager that offers institutional investors traditional, alternative and yield-orientated investment solutions across public and private fixed income markets, as well as global real estate equity and debt. SLC Management is the brand name for the institutional asset management business of Sun Life Financial Inc. under which the entities of Sun Life Capital Management (U.S.) LLC in the United States, and Sun Life Capital Management (Canada) Inc. in Canada operate. These entities are also referred to as SLC Fixed Income and represent the investment grade public and private fixed income strategies of SLC Management.

BGO, InfraRed Capital Partners (InfraRed), Crescent Capital Group (Crescent) and Advisors Asset Management (AAM) are also part of SLC Management. BGO is a leading, global real estate investment management advisor and a globally recognized provider of real estate services. InfraRed is an international investment manager focused on infrastructure, managing equity capital in multiple private and listed funds, primarily for institutional investors across the globe. Crescent is a global alternative credit investment manager singularly focused on corporate credit through strategies that invest in marketable and privately originated debt securities. AAM is an independent U.S. retail distribution firm that provides a range of solutions and products to financial advisors at wirehouses, registered investment advisors and independent broker-dealers.

As of June 30, 2025, SLC Management has assets under management of C$408 billion (US$300 billion). Total firm AUM includes assets managed by the SLC Management group of companies on behalf of external clients, and the Sun Life General Account. AUM includes unfunded commitments, cash, equity, and other balances. Total firm AUM excludes assets under administration. AAM represents an additional approximate C$13 billion (US$9 billion) in assets under administration. The methodologies used to compile the total AUM are subject to change and may not reflect regulatory AUM.

For more information, please visit slcmanagement.com.

Media Relations Contact
Hannah Stewart
Director, Communications & Media Relations, SLC Management
646-761-6344
hannah.stewart@slcmanagement.com

SLC-20251027-4919315

SOURCE SLC Management