Sumitomo Life Insurance is considering allocating about ?300 billion ($1.9 billion) on private credit in the fiscal year starting April, in the latest push by a Japanese financial firm into alternative assets to boost returns.
The Osaka-based insurer has been gradually increasing its private credit holdings, and ¡°we¡¯ve accumulated considerable expertise,¡± said the firm¡¯s chief executive officer, Yukinori Takada. The asset class is attractive because ¡°it offers the prospect of high spreads,¡± he said in an interview.
Global investor sentiment toward the $1.8 trillion private credit industry has soured as weaker performance triggers a wave of redemptions from funds, but that hasn¡¯t damped Japanese insurers¡¯ enthusiasm for the debt. The companies are considering putting more of their cash in riskier products like private credit as interest rates rise, and they meet new regulations measuring their ability to pay insurance claims.
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