Lincoln's Bronchetti on Insurance-Private Markets Partnership

In Brief:

Insurance companies are emerging as the critical bridge to democratize private markets for mainstream investors, leveraging their patient capital and established distribution networks to solve a fundamental access problem that has kept alternative investments limited to institutions. Jayson Bronchetti, EVP and CIO of Lincoln Financial who manages over $300 billion in assets, explained on the Alt Goes Mainstream podcast from Lincoln's headquarters in Radner, Pennsylvania how his firm's fresh partnerships with Bain Capital and Partners Group represent a new model for bringing institutional-quality strategies to individual investors. With a 500-strong wholesaler network and 120-year legacy of trust, Lincoln is positioned to reshape retirement planning for millions of Americans facing a pension crisis. Bronchetti warns that without proper education and structuring, the rapid growth in private credit could create significant risks, but predicts that within a decade, private markets will become a significant component of retiree portfolios.

Big Picture Drivers:

• Democratization: Private markets moving from institutional-only to mainstream wealth channels through innovative product structures and distribution partnerships

• Asset-Liability Matching: Insurance companies' well-defined liability profiles create natural advantages for investing in illiquid private market strategies

• Bank Disintermediation: Regulatory changes pushing traditional bank lending into private credit markets, creating massive growth opportunities

• Retirement Crisis: Disappearing pensions driving need for higher-return strategies to fund Americans' retirement security

Key Topics Covered:

• Strategic Partnerships: How Lincoln partners with firms like Bain Capital and Partners Group to co-manufacture private market products for retail distribution

• Product Innovation: Development of evergreen funds, interval funds, and tender offer structures to make illiquid strategies accessible to individual investors

• Distribution Advantage: Leveraging Lincoln's 500 wholesalers and relationships with 60,000 financial professionals to educate and distribute complex products

• Risk Management: Applying insurance industry asset-liability management discipline to private market investing and product structuring

Key Insights:

• Scale Requirements: Lincoln's $120 billion general account demands private market managers who can deploy capital at institutional scale while maintaining performance, limiting partnership opportunities to proven firms with significant sourcing capabilities.

• Education Infrastructure: Insurance wholesalers have a natural advantage in selling private markets because they already excel at explaining complex annuity and life insurance products to financial advisors and clients.

• Liquidity Misconceptions: The key distinction isn't between public and private markets but understanding when you actually need liquidity versus when it's just perceived as necessary, which should drive asset allocation decisions.

• Investment Grade Focus: The most compelling private credit opportunities are investment-grade strategies that historically lived on bank balance sheets but are now available to patient capital providers like insurance companies.

• Technology Enablement: Successful democratization of private markets for retirement plans will require significant technology infrastructure to deliver mutual fund-like administrative capabilities at massive scale.

• Strategic Value Creation: Insurance companies offer private market managers something that takes decades to build—trusted distribution relationships and regulatory expertise that can't be easily replicated.

Memorable Quotes:

• "We can be a full stack capital provider up and down" - Bronchetti, explaining how insurance companies can participate across the entire capital structure rather than just equity deals

• "When things go from the perception of less risky to then all of a sudden risky, or perception of liquid to then all of a sudden illiquid, that's where you run into problems" - Bronchetti, warning about risks in product innovation

• "Every time you play that, we're getting a return on that" - Bronchetti, describing how he explains music royalty investments to wholesalers using their Spotify playlists

• "There's no shortcuts, and so we need to be very purposeful and build things in a way that works" - Bronchetti, on Lincoln's 120-year legacy driving disciplined approach to product development

• "If I look five or certainly ten years from now, I think that private markets are going to be a big piece of retirees' portfolios" - Bronchetti, predicting the future of retirement investing

The Wrap:

Lincoln Financial's approach represents a blueprint for how traditional financial institutions can bridge the gap between sophisticated institutional strategies and mainstream investors. By combining insurance industry discipline with private market expertise and established distribution networks, firms like Lincoln are positioned to lead the next phase of alternative investment democratization. The success of these partnerships will likely determine whether private markets can truly scale to serve the broader retirement security needs of American families, while the risks Bronchetti identifies around education and proper structuring will be critical to monitor as growth accelerates.