Alternative opportunities for insurers

In our Q1 2026 edition of Alternative Opportunities for Insurers, we continue to cover views on a variety of private asset classes from Invesco Solutions and our partner firms. Within this piece, we’ll present a framework for analyzing across alternative markets to help inform insurers’ investment decisions.

Private credit

We remain constructive on private credit (direct lending) as we expect private equity deal activity to continue improving; given its defensive properties and the spread pickup available relative to public credit, private credit is particularly attractive for insurance portfolios. Real estate debt also continues to be attractive for insurance portfolios in light of a recovering real estate equity market – and considering its high current income and favorable risk-based capital treatment.

Private equity

We remain underweight private equity. Given still-high valuations and borrowing costs, the return potential doesn’t justify utilizing precious risk-based capital budget. For insurers seeking equity-like strategies, distressed credit / special situations may be a better place to deploy capital.

Real assets

Our view on real estate equity continues to improve as valuations seem to have bottomed while deal activity is picking up. As long-term investors, insurers allocating to the space now may benefit from attractive forward-looking returns, and real estate equity is more capital-efficient than other forms of private equity exposure.