Blackstone backs F&G annuity reinsurance sidecar with $1bn of private capital

Blackstone has again demonstrated its appetite to source insurance and reinsurance-linked opportunities for private capital clients with a newly announced life and annuities flow reinsurance sidecar-like structure established for F&G Annuities & Life, Inc. and backed by $1 billion of capital from Blackstone managed funds.

The proliferation of capital light reinsurance models in the life and annuity insurance sector continues apace, with now numerous large players having secured partnerships with asset managers and private capital to fund portions of their life and annuity reinsurance needs.

Blackstone has had an investment management partnership with F&G Annuities & Life for a number of years, providing its investment management capabilities to a portion of the life and annuity specialists assets.

Now, the partnership has deepened as F&G announced the establishment of a new reinsurance vehicle that will support a portion of its annuity business through a quota share flow reinsurance agreement.

F&G has entered into a strategic partnership with a new and as yet unnamed reinsurance vehicle that is backed by Blackstone managed funds, with around $1 billion of capital commitments anticipated to be made.

This reinsurance vehicle is set to provide F&G with long-term, on-demand capital to support its growth and expansion, while also moderating volatility within its life and annuity business.

F&G and the sidecar-like structure have entered into a forward flow reinsurance agreement on a quota share basis, covering certain fixed indexed annuity products, from August 1st 2025, the company explained.

The reinsurance vehicle is expected to help F&G manage its long-term liabilities, reinsuring some of its fixed indexed annuity sales and assisting in a continued shift to a “capital-light model”, which F&G says remains “core to its strategy.”

It’s a further expression of the strength of the F&G and Blackstone partnership, that F&G states, “underscores our shared commitment to delivering innovative, value-enhancing solutions.”

The reinsurance structure will operate akin to many of the sidecar vehicles in the life and annuity space, providing third-party capital to the underwriter while delivering a source of insurance-linked returns that will flow to the benefit of the backer, in this case Blackstone, and its third-party investor base behind the specific funds that have committed the capital.

“We are very excited for this opportunity that recognizes Blackstone as a trusted partner and enables us to fund a portion of our growth with participation from private, long-term capital providers,” Chris Blunt, Chief Executive Officer explained. “This transaction positions us to further capitalize on growth opportunities that we see in the market and positions us to provide life and annuity solutions to more distribution partners, helping them meet their customer needs. The partnership will also move F&G toward a more fee-based, higher margin and less capital intensive business and is expected to be quite positive in our efforts to expand our return on equity over time.”

Capital-light has become an increasingly important model in the life and annuity insurance sector, while so too has access to third-party capital that can both reinsure and become a supportive source of capital for growth.

Using quota share and flow reinsurance structures that sit adjacent to the underwriter of the risk, in a sidecar-like fashion, enables private capital to be crowded in to share in the returns and losses of that business, while also building a pool of premium assets at the same time, that of course need managing.

Of course, Blackstone is no stranger to insurance and reinsurance, having built numerous ways to source returns from the sector over the years for its clients, while also delivering its asset management expertise to industry participants as well.

Another more recent example of which is the firm’s multi-year reinsurance sidecar-like syndicate partnership at Lloyd’s with insurance giant AIG,

Aligned partnerships with large and growing insurance market participants, where Blackstone can put investor client capital to work and source returns for them, while building on its strong relationships with financial institutions and potentially its asset management activity as well, enable the company to become deeply engaged in long-term arrangements that can deliver meaningful value to all sides.

For F&G, the capital-light approach and access to efficient reinsurance capacity from a long-term partner can help to deliver certainty, moderate volatility and provide capital to fuel ongoing growth.

Find details of numerous reinsurance sidecar investments and transactions, including life reinsurance sidecar structures, in our directory of collateralized reinsurance sidecar transactions.