The potential benefits of an integrated public-private approach

Insurers have long used both public and private credit to support income generation, liability matching and portfolio diversification. Under the National Association of Insurance Commissioners’ formal definition of private bonds—which includes freely tradable securities issued under Rule 144A—private-bond allocations remained at or near historical highs in 2024: 45.6% of total bonds for the life sector and 19.8% for the P&C sector.¹

However, as it appears that issuers today are increasingly moving more fluidly across financing channels, we believe insurers can no longer view public and private credit as competing allocations. In our view, this evolving landscape reinforces the value of an integrated public-private approach for insurers too.

A shifting opportunity set

Over the past several decades, the opportunity set available to investors has shifted meaningfully. The number of publicly listed US companies has fallen by roughly half since the late 1990s—from approximately 8,000 to fewer than 4,000 today.² Many companies are choosing to remain private for longer, enabling a greater share of growth and value creation to occur outside of public markets.³

This evolution has contributed to the rapid expansion of private markets. Today, there are more than 1,200 private companies globally with valuations exceeding $1 billion, dozens of private companies now valued above $10 billion and several exceeding $100 billion valuations.⁴

As the public market universe has contracted and private markets have expanded, the distinction between the two is becoming less about company quality or scale and more about where companies choose to raise capital at different stages of their evolution. 

For issuers today the optimal financing channel depends on which market offers the best combination of execution, tenor, pricing, flexibility and investor demand. As a result, financing activity is spreading across registered bonds, Rule 144A markets, traditional 4(a)(2) private placements, bank debt, direct lending and asset-backed structures.

Borrowers are treating these markets as a continuum of financing options, moving between channels based on market conditions, asset type, maturity needs, covenant flexibility and investor demand. Recent transactions illustrate the point:

• Large investment-grade (IG) corporates are diversifying across markets. Mars financed its pending Kellanova acquisition with both a $26 billion Rule 144A/Regulation S bond transaction and a separate $1 billion traditional private placement.⁵ Danaher similarly used a CHF2.38 billion institutional private placement, alongside prior euro and Swiss bond issuance, to diversify funding for its acquisition strategy.⁶
• Infrastructure-heavy issuers are separating asset-level financing from parent-company debt. Zayo evaluated both the 4(a)(2) private placement market and securitized market before using fiber-network securitizations, including a $1.42 billion ABS issuance, to refinance corporate secured debt and fund network investment.⁷ QTS has accessed bank private placements, high-grade bonds and a $4.5 billion-plus Rule 144A secured-note financing to support data-center growth.⁸ Meta’s Hyperion data-center financing similarly used an approximately $27 billion investment-grade 144A structure supported by project cash flows and contractual protections.⁹
• Non-corporate issuers are using the same playbook. The University of Michigan has issued long-dated public revenue bonds, maintained commercial paper programs and also completed a 4(a)(2) student housing transaction.¹⁰ Cleveland Clinic has combined public hospital revenue bonds, commercial paper, variable-rate debt and direct placements, including a $300 million bond sold directly to Bank of America.¹¹ Across these examples, issuers are not choosing “public” or “private” once and for all. They are selecting the channel best suited to each financing need—by project, maturity, structure, currency and market window.

Complementary tools for insurers

As we see issuers move more fluidly across financing channels, insurers can benefit from treating public and private credit as complementary tools within a unified credit platform rather than viewing them as competing allocations. Public markets can provide liquidity, price discovery and tactical flexibility, while private markets can offer incremental spread, stronger lender protections and enhanced downside mitigation through covenant structures.

The most effective way to access an integrated approach is often to partner with a manager that has long-standing capabilities in both public and private credit. Integrated research teams can identify relative value opportunities across markets, compare issuers regardless of issuance format, and shift capital dynamically as risk-adjusted opportunities change. 

This setup can also improve the ability to optimize across key balance-sheet considerations, including regulatory designation, ratings migration risk, capital charges, liquidity needs, asset-liability matching and ratings-agency treatment. This can allow insurers to maintain liquidity through public holdings while selectively allocating to private opportunities when compensation for illiquidity is attractive.

A combined public-private platform also potentially strengthens decision-making by connecting market signals, issuer knowledge, structural underwriting and relative value assessment across the full investment process. In public markets, where execution windows can be compressed, shared sector views and issuer history can support faster conviction. In private markets, earlier engagement can create more time to evaluate structure, protections and compensation. Together, these perspectives help deepen insight, clarify value and improve portfolio calibration across risk, pricing and sizing.

Finally, managers with capabilities spanning both public and private markets may be better positioned to evaluate relative value, maintain issuer relationships and access the broadest opportunity set on behalf of policyholders. 

Figure 1: Connected teams drive more informed investment decisions

Source: L&G – Asset Management, America. For illustrative purposes only.

 

1. NAIC. Data as of July 31, 2026.

2. Bloomberg. Data as of July 31, 2026.

3. Pitchbook.

4. CB Insights, Pitchbook.

5. Simpson Thacher, Mars.

6. WilmerHale, Swissinfo.

7. Fitch Ratings, Business Wire / Zayo.

8. Simpson Thacher, New Project Media / Bisnow.

9. The Wall Street Journal, “BlackRock Among the Biggest Investors in Meta’s Giant Data-Center Debt Deal, October 21, 2025. Forbes, “The Strange Case of Meta,” November 16, 2025.

10. University of Michigan Bonds, L&G Asset Management – America.

11. EMMA / MSRB, S&P Global / MuniChain.

Disclosures

Unless otherwise stated, references herein to "L&G" and “L&G – Asset Management” refer to the global asset management business of Legal & General Group plc. that includes Legal & General Investment Management Ltd. (a U.K. FCA authorized adviser), Legal & General Investment Management America, Inc. (a U.S. SEC registered investment adviser) Legal & General Investment Management Asia Limited (a Hong Kong SFC registered adviser), Legal & General Investment Management Japan KK (licensed by the FAS in Japan), and LGIM Singapore Pte. Ltd. (licensed by the MAS in Singapore). The LGIM Stewardship Team acts on behalf of all such locally authorized entities.

This material is intended to provide only general educational information and market commentary. Views and opinions expressed herein are as of the date set forth above and may change based on market and other conditions. The material may not be reproduced or distributed. The material is for informational purposes only and is not intended as a solicitation to buy or sell any securities or other financial instrument or to provide any investment advice or service. L&G – Asset Management, America does not guarantee the timeliness, sequence, accuracy or completeness of information included. Past performance should not be taken as an indication or guarantee of future performance and no representation, express or implied, is made regarding future performance.

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