Challenges and Opportunities Facing Private Credit Investors

Image

Stewart: Hey, welcome back to The Home of the World's Smartest Money. This is the InsuranceAUM Podcast. My name's Stewart Foley. I'll be your host, and I'm really glad to have you with us today. As all of you know, I'm very sure private credit has enjoyed years of extraordinary growth. But what happens when the market stops rewarding everyone and starts separating the managers who can originate loans from those who can actually manage them through trouble?

And today's episode is entitled Challenges and Opportunities Facing Private Credit Investors.

And I'm joined by Richard Miller, who goes by Rick, who's the Group Managing Director and Chief Investment Officer of the TCW Private Credit Group. Rick has more than 30 years of experience in credit markets and has led middle market lending strategy since 2001. He's navigated multiple market cycles along the way. And before joining TCW in 2013, he led special situations at Regiment Capital and held senior credit positions across several Wall Street firms. Rick, welcome to the program. We're thrilled to have you.

Rick: Thanks for having me, Stewart. It's great to be here.

Stewart: We're very happy to have you. So we always start the same way, which is where did you grow up and what is a fun fact that your colleagues at TCW would be interested to know?

Rick: Well, I grew up outside of Cleveland, Ohio. I was born in Cleveland and was raised in a suburb and went to school there. But once I went to college, I never really returned to live again, but I'm a Buckeye.

Stewart: I love that. That's great.

Rick: In terms of fun facts, I think I was asked that very question at a town hall internally and I did share this, but one of my hobbies is keeping bees. So I'm not sure that TCW folks will be so surprised, but that's something that not a lot of folks are aware of.

Stewart: That's cool. So that's something that we do a fair amount of here in Texas, and the development that I live in actually has beehives here. So in Texas, there's an ag exemption and bees qualify. So there are companies that will actually service it. You have the bees and, like your pool, they'll come and service your bees, which is really interesting. I'll talk to you more about that offline. That's cool.

Rick: I think I need that service given the success I've had with the bees and the honey, but it's actually a great, relaxing hobby, and I find that bees are fascinating.

Stewart: Yeah, it's interesting. So we also have sheep here too, which is a whole different story. So you've been lending money in middle markets for 25 years, long before private credit became the hottest allocation in insurance portfolios for sure. Can you talk a little bit about how middle market lending has changed over that period and what's fundamentally different about that market today?

Rick: Well, the change is pretty self-evident. When you go back to the time where we started in '01, banks still roamed the earth. They were still the dominant lender in corporate middle market. And as you mentioned in the script, my background, Regiment Capital, the strategy was to do what the banks either wouldn't, couldn't, or didn't want to do and charge a premium for it, make sure that risk wasn't why you got that premium. And other than that, really execute on the basic attributes of senior secured debt. You know, modest leverage, extensive diligence, active, actionable documentation, close monitoring, and figuring out that you have one single objective: minimize principal loss.

That concept was to do exactly that, but do it where the banks wouldn't or couldn't go and charge a premium for it. And it was an interesting time. And I think what the opportunity that had been identified, and not by me certainly, but that I benefited from, was that the commercial banks were slowly being disintermediated by the very intended consequence of regulatory action, that regulators really wanted to take corporate lending out of the product offering of middle market banks.

They had gone after the money center banks in the '90s and were after the rest of banks in the U.S. starting in the early 2000s. And that was slowly happening as the banks became less and less critical to the corporate debt. The GFC comes around and it felt like banks left overnight. They did not. This was a trend that was going on and happening, but it certainly expedited their exit.

And when they exited, it created a vacuum. As you know, Wall Street is very successful and good at filling vacuums and opportunities, and did so. And many people call the asset class being started kind of post-GFC. That's largely true in terms of its standalone nature or its popularity and the fact that it became this allocator's asset class to send money to. But senior secured lending is not new. It's probably four or 5,000 years old.

For the last 200 years, commercial banks were the providers of that. And then about 15, 16 years ago, it became non-banks. And I think one of the things that we benefited from starting at that time was that we were designed to do what the banks couldn't or wouldn't do, as I said. Most of the capital that came into the market post-GFC had a very different rationale when they were raising capital. Their rationale was effectively, the banks are gone, we're here to replace the banks. That was necessary, that was accurate, but it was very different than what our role was.

We really weren't fazed by the exit of the banks and taking the seat by the non-banks. We were already in this differentiated lane per our mandate and our design back in '01. So the market has certainly changed. Private credit has changed dramatically from what we were doing in those early 2000s to what is done today. And that exodus from the market of the commercial banks in the middle market really created what today we see as this exciting and very attractive asset class.

Now, over the last handful of years, I think that what you've seen is probably the result of an incredibly benign investing climate that the private credit asset class was able to start off in post-GFC, can be described as near-zero interest rates on the base rates. It was LIBOR at first, then SOFR. No recessions, an incredibly stable, low-growth economic backdrop to operate in. Enterprise value multiples that did nothing but rise steadily up and to the right, no defaults.

And so the environment was really one in which deployment moved to the head of the line of priorities for managers, not really a lot of the basic tenets of senior secured lending, which is, in our school of thought, items one, two, and three are principal preservation.

So sending the money out isn't really that hard. Sometimes getting it back can be difficult, and that's really what we think the premise of senior secured lending should be. And I think it's gotten lost a little bit over the years, but that's a little bit of maybe a very summarized snapshot of our career, my career in the private credit space.

Stewart: Yeah. And I mean, one of the things that your materials caught my attention is that your view of middle market lending is facing its first real test since becoming an established asset class after the GFC. That's a meaningful statement, right? And it's interesting to me because you've talked about those low interest rates and I don't know that anyone was expecting the run-up in rates that we've seen.

And so it's not that the companies are not doing business, their businesses are bad, but the rate environment has changed. So can you talk a little bit about what's different about this environment and what will separate, and this is the $64 billion question, what will separate managers who can navigate it successfully from those who maybe will do it less well?

Rick: There's a lot in that question, Stewart. Let me try to unpack it a little bit.

Stewart: That's why I make the big money over here, is these whizbang questions.

Rick: That was a good one. I think that the growth in the space had a lot of very interesting timing characteristics to it. As we all know, the private equity community really started to move down into the middle market actively from large market. That coincided with the environment that I just described as being very benign for lending, for investing in general.

Think about any investment asset class, venture capital, private equity, private credit, public equity, public debt. It was a good time to be an investor. We all looked a lot smarter than maybe we really are. And that environment continued really up until about COVID. And for the first time since the GFC, you had this introduction of uncertainty, of volatility. And that volatility was very short-lived, at least in the financial markets. I should make sure I point out that 40, 45 days, 60 days or so, it felt like the world was coming to an end for a lot of these businesses.

Revenues were heading towards zero given the mandated lockdowns. And then we rebounded almost like a V. The flooding of liquidity from both the monetary and fiscal policy reactions to all of that saved the markets, us included. And what followed from that obviously generated some of the inflationary trends that we are living with even today. It certainly changed some of the supply chain and sourcing decisions and commodity prices and labor costs that we're still digesting even today that kind of trace back to that period.

But I think the real change there, maybe writ large, is that it introduced volatility for the first time since the GFC, followed by, a few years later in '22, the rise in interest rates, to your point. I think the lesson, Stewart, that I would take from all of that is that we are lenders and the best we can do, a win for us, is returning the principal, returning the capital, earning a reasonable amount of interest rate and returning that initial investment.

We don't get two times our money, three times our money, or four times our money. The best we do is sending it back and then trying to do it again. And our market, I think, lost sight a little bit of that and started making the assumptions that you just described perfectly, that rates would stay low forever. You had a whole industry that was creating balance sheets and establishing balance sheets with the assumption that rates would stay low forever. They didn't.

The assumption that enterprise value multiples would continue to climb up and to the right, they haven't. And if we see them start to contract further, that has its own set of problems. When you realize the limitations of your investment upside and downside, I think as a lender, you start behaving very differently than what we've seen the market do. So in short, I think the answer to that question of what's happened is that our market got a little too optimistic.

Our market leaned into the idea of deployment above all else, and I think lost focus on principal preservation. And four or five years from now, or three years from now, as we look back on this period, I'm not sure it's going to be, was software good or bad, or was the wealth channel and redemptions good or bad? I think those are interesting and important topics, but I really think it's going to be around the deterioration of underwriting standards by lenders for a whole host of reasons, some of which we've touched on.

But the lack of that underwriting discipline doesn't make the asset class bad. I think what it does is it highlights how important manager selection is to the investor.

Stewart: It's interesting because everybody says that they're not changing their underwriting standards. Everybody's like, "No, no, this is not us. We are not doing that." And yet that is the cause of virtually every financial disruption that we've had. I mean, the GFC was essentially focusing on deployment versus quality of underwriting.

And so that's an interesting, I mean, I think that's everyone's concern is, gee, there's been a lot of capital flow this way. Was it all deployed as prudently as, was it uniformly deployed prudently? And I'm not sure we've had enough. We don't know yet, it seems.

So my notes say that as of June 30th, insurance companies, and this surprised me, I'll be honest with you, that the insurance companies represented 44% of TCW's private credit assets under management and that they've invested across all three of your strategies.

Can you talk a little bit, so when I still owned InsuranceAUM, I actually trademarked Home of the World's Smartest Money because I sincerely believe that insurance companies are the world's smartest money because they've got so many constraints and yet they manage to create competitive rates of return.

So can you talk a little bit about what insurance companies value about your approach and how have those relationships shaped your business?

Rick: It's interesting. I think there's probably a lot of industry responses to that question about what has caused insurance companies to gravitate to private credit. I can speak maybe more accurately to why they're with us. We've had insurance investors as part of our LP base since the beginning of our strategy, or early on, the early years of our strategy, long before it was either an asset class or a cool place to be, or insurance companies were moving actively as a group into this space.

I think the low interest rates and the search for higher rates and differentiated returns and correlations and all that have a lot to do with the attractiveness to the insurance industry. But I think as it relates to us, it probably has a lot to do, and I think it's embedded a little bit in your question, Stewart. Insurance investors have debt desks. They have debt investors sitting in their firms.

They have high yield, they have investment grade, they have bank debt, they do below investment grade, above investment grade. They have investors. And I think when we get in front of professional investors like insurance companies, they recognize something different, the alpha, if you will, to what maybe beta story they're hearing a lot in the marketplace.

So I think it helps. It has helped us pretty dramatically over the years that the insurance industry has come to us almost like a peer. We're investors, you're investors. We're never going to put together a group that can originate private debt like you've done, especially in the middle market that's just dispersed and widely divided across the country and now the globe. And so they would look to outsource that, but at the heart of it, they're credit. They're credit guys and girls and they're focused on returns and risk-adjusted returns and, I think, appreciated some of the critical differences in what separate, I think, good managers, alpha managers from beta managers, unique origination.

It's critical in what your go-to-market is. Are you doing what everybody else is doing, or are you doing something a little different? How long you've been doing something is important. You mentioned it earlier, the ability to fix your mistakes, the ability to manage underperforming investments, no matter what the reason.

It could be that we made a mistake underwriting. It could be that there was an act of God, there was a hurricane. It could be that that industry didn't do well or we had a recession. It doesn't really matter. This asset class is really about principal preservation. And look, there's a whole bunch of things you can do when you're a senior secured lender to avoid principal loss, manage things back to health. There's a lot of remedies to draw on, levers to pull, if you will. We like to refer to them as branches to grab as you're falling out of the tree, but you have to have a manager that's both capable of using those remedies as well as willing to use them.

There's a lot of hard decisions you have to make as it relates to the borrower around management and board and debt-to-equity splits or what have you. And so I think at the heart of it, the insurance industry understood early on that we had a little bit of a different go-to-market, different approach, and more consistent approach around risk-adjusted returns and very early on became investors of ours.

Today, I would estimate that a little bit over 40% of our capital base is still in the insurance space, and it's really been a great partnership. We've had to adjust to regulatory changes and capital charges and the needs of these investors to manage the right vehicles and the right geographies and the right treatments, but it's been a great partnership and we value that group quite a bit.

Stewart: Yeah, you've touched on something where I want to go next, which is everybody comes out and says, "Oh, we're really good underwriters. We're very diligent, blah, blah, blah." But the portfolio management side of it is really important. It's not just, things change, as you just pointed out. There's just several things that can change. The rates can change, the industry can change. There can be disruptions, there can be new interest, whatever it may be.

So can you talk a little bit about how your underwriting process and your portfolio management process help you manage situations that may not go according to plan?

Rick: Well, I think most of the answers to that have to do with the asset class. The senior secured asset class, I'm a huge fan of. I think sometimes when I'm speaking with people, I think I sometimes come across a little bit too negative about the state of play in private credit, and you have to take a step back.

It's first lien, it's first out, last to lose, top of the capital structure, an actionable loan agreement, treated better in bankruptcy. There's just all of these advantages, reporting, more frequent reporting and information flow, the ability to access inside information and talk to management and understand what and why they're doing things.

So once again, when treated appropriately and when invested appropriately, this is a great asset class. And I think probably the short answer to your question is we've never deviated from that old-school banking. Know who you're lending to, speak to them, have a contract, the loan document, set aside how you're going to treat each other, set performance requirements.

So if they deviate materially from that performance, you're back at the table asking them, what went wrong? Why did it go wrong? What are you doing to fix it? Is that still aligned with where I think you should be and what you should be doing? Are our interests aligned? Are my risks greater or less?

I can reassess my investment, raise the economics, improve the economics, reduce my exposure, or maybe at an extreme, ask you to slide over and let me drive. And so I think the tenets and the attributes, characteristics of senior secured lending make it just a superior asset class. What other asset class gives you that kind of hedge, that kind of do-over other than this?

Now, if that's how it's supposed to be, let's look at how it is today. And largely because of the benign credit environment that we've lived through and some bad habits and the amount of money that came into the space, the dropping of some standards and some disciplines that was not punished, was not exposed, was not identified as a problem for more than a few years has led to this, I think, much more aggressive risk appetite by the marketplace as investors have kind of forgotten a little bit of that risk-adjusted return approach and that principal preservation mindset.

Private equity is a demanding borrower. It's a very competitive landscape. And so more and more lenders started to do overly aggressive, in our view, overly aggressive things to make sure they were the winner so that they could deploy capital, fill up their portfolio, raise the next fund, increase the enterprise value of their business. And that race created almost this race to the bottom in terms of those protections, those historical protections that I've just referenced, so important in making it a great asset class.

I think it's very simple that if you hang to those primary old-school tenets, you can withstand a recession, you can withstand a hurricane, you can withstand an underwriting mistake because you have a lot of remedies available to you that can protect you.

But over the years, what did our market do? It started to change the metrics we use. We went from a cash flow metric to a loan-to-value metric. We went from an EBITDA metric, cash flow again, to a revenue metric. We got comfortable as an industry lending to negative cash flow businesses that carried much more equity-like risk profiles than you would think of historically for this asset class.

What we've done is really just stuck to those original characteristics and attributes, and it's allowed us to differentiate over the years what we will and won't do. We don't avoid sponsors. We don't market exclusively to sponsors. We're what I would consider owner indifferent. Let the underlying credit decide how we're going to price something and how much money we're going to provide to that borrower.

But the consistency is around worrying about the things that could happen to you. We talked earlier about interest rates. We've maintained a very modest debt-to-EBITDA profile for many years, and this is going to sound like I'm bragging, and it's quite the opposite.

We were concerned for now 12, 13 years that interest rates were going to go up, and they never did until '22. So remember, I've been in this business since '01, constantly worried that interest rates were going to spike, so we kept our debt-to-EBITDA modest. And then finally, '22, 10, 11 years after the GFC had kind of run its course and we'd come out of it, and finally interest rates go up.

I think that kind of discipline gets rewarded when you're a senior secured lender and all you can do is get your money back. And so that when interest rates went up 500 basis points, that wasn't enough to tip our businesses over by themselves. There are other things that happen when rates go up, but as an interest rate alone, you don't want to create a balance sheet that just can't take it because you put too much debt because you assumed that you were in a static environment, not the dynamic world that we all live in.

Now, I would use that same example for enterprise value multiples, that loan-to-value metric, which we use, but it's more of a sanity check than it is a go/no-go decision point because none of us control enterprise value multiples. They go up, they go down, the market gets effusive, they get overly negative. It can be an emotional metric, but that loan-to-value metric relies on a valuation that may be elevated and arguably unsustainable and you end up providing too much debt.

And then when you see a contraction in that, now you have two worries, two risks as an investor. Not only do you need your cash flow to be there, you're going to try to catch lightning in a bottle again and hit that enterprise value multiple up to the stratosphere so you can get your right loan-to-value or your capital back.

Those are the kind of things that, as a lender, we don't think you're getting paid for. You can't have a deterioration of your underwriting standards and not change your economics, and I think that's what our market did.

Stewart: That's super helpful and I appreciate the explanation. One of the things I love about our industry is its ability to come up with names. The latest example is SaaSpocalypse, which I was like, "Wow, that took some creativity from an industry that's not known for it."

And so the pressure, for those who don't know SaaSpocalypse, is the pressure that AI disruption will change software valuations and change the software businesses themselves. And so your team points to going back to the scene that you just talked about with regard to discipline and concentration risk. So can you talk a little bit about what the SaaSpocalypse has revealed in private credit and maybe what has been different about your approach?

Rick: I think the easier answer to give you is how we're different, and then I'll try to come back and give you a balanced response to what it says about the industry. This whole software exposure discussion that really reared its head, it really felt to us like more of a narrative change.

Really, for the last seven or eight years in our market, not only was private credit had this halo over its head, could do no wrong, was this perfect asset class, software was bulletproof. The industry was different this time. It was defensive, anti-cyclical. You can change the metrics that I referenced earlier in your lending decisions, and it was all fine.

The narrative shifted rather dramatically that private credit became kind of a scary place to be, and software was now radioactive. I think the first narrative was overly positive and wrong, and I think that second narrative is overly negative and wrong.

But notwithstanding all of that, you had the markets throwing money at these software companies, and then all of a sudden you had to take your money out of private credit and nobody wanted to touch a software business with a 10-foot pole. I think somewhere in the middle is the truth, but I do think it provides some evidence that should be discussed.

Number one, your job as a lender and a portfolio manager of bank loans is really about risk mitigation, and risk management 101 is running a diversified portfolio. And so the concentration levels that you see in software are, to me, the sin, the error, the mistake that the market's made. Our job is to run a diversified book. We have drawdown capital. You know what your exposure is, you know what you don't want too much more of or where you need some additional exposure.

So adding on and having 20%, 25%, 30% or more of any one industry in your portfolio, we think is just a mistake. It's a risk management mistake.

Stewart: Can I ask a question in there? Is that related to the pressure to deploy?

Rick: I think it's the combination of pressure to deploy and focusing exclusively on the private equity community as your borrower, because private equity, smart investors, savvy investors, demanding borrowers, as I mentioned, arguably put 60% of their capital over the last handful of years in three sectors, three industries: tech software, business services, and healthcare.

And if all your business is doing is managing to and servicing the private equity world, that's what your portfolio's going to look like. There's something on the order of 10%, 12%, no more than 15% of the private companies out there are owned by private equity. There's a whole bunch of white space of private companies that they don't own, and they're in a variety of different industries.

I think the idea of going to the sponsor has its place in portfolios, but it's really all our market was providing, and I'm overstating a bit. It was the primary product that our market was putting out there, was private equity-sponsored private credit.

And so if private equity was in those three sectors, that's where private credit is, and that's what you saw there. So it's a combination of that pressure to deploy, and that's where the activity was, and your customer, your client, the sponsor who's going to do 10, 12 deals a year, and seven of them are sponsors, or maybe all of them are software companies, that's what your portfolio's going to look like.

I think as an investor, you got to understand the lack of diversification or why you're doing that or what else you need to do in your private credit allocation to at least offset that and manage that.

Look, software in and of itself isn't a bad thing, and I think it's been overly negative. I can tell you we don't have virtually any exposure to it, but it wasn't a macro decision we made.

It wasn't a decision saying, "That'd be a better story to tell you, that we had a meeting and we said software's going to get scary soon. Let's stay out of it." That's not why we're not in it. Ten, 12 years ago, we had some of these recurring-revenue software loans in our book. We just weren't winning. They were asking for increasingly more and more debt profile at lower and lower pricing, at looser and looser documentation, three things that's not how we compete.

And so the market kind of moved away from us and we just weren't going to be a viable candidate or a competitive lender in those situations. And we moved on to other sectors that didn't have quite that froth or crowd around it. So we really don't have any. And it feels good to say in today's world, we don't have software exposure like all those other folks do.

But the facts just to date aren't there to support that everybody in software is doomed. I think it's been overdone, overly negative, the whole AI discussion. I think you got to take a step back because we lend to effectively widget companies. AI is coming for all of us. We've got to figure out AI in whatever industry you're in, whether it be software or industrial or service, asset-light, asset-heavy, it doesn't really matter.

So I think the market is reacting and overreacting to a lot of different things. I think the real portfolio discussion or investment discussion around software has more to do with lack of diversification than anything else. And you may actually even be able to maybe go around, were they priced accordingly effectively? Were the documentation protections and actionable triggers there to protect the lenders? All of that will come in time.

But in and of itself, the software exposure, I think, has probably had more to do with lack of diversification than that software's now a bad industry. It's not.

Stewart: No, I appreciate that. And it sounds like the market moves and your discipline doesn't. And so that kind of lands you where you are, which seems to have worked out.

Rick: Stewart, that's why you get paid the big bucks because that was said a lot quicker than I've said it.

Stewart: Well, I mean, it's interesting because I remember in the late '90s when everybody said Buffett lost it because he wasn't. And his answer was, "I can't make sense of the valuations." And they were like, "Oh, he doesn't understand." And he has a reputation for being very disciplined in his decision-making. And so you can clearly see how that plays out in times like this in particular.

One of the things, and I just want to wrap here, but one of the things that interests me about your business is that you've been structuring investment vehicles around insurance company needs for quite a while. And if my notes are correct, TCW's first rated note vehicle was developed with an insurance company in 2018.

How do you design private credit investment structures around an insurer's particular needs, and how has that evolved as the allocations have grown?

Rick: Well, that's kind of the easiest question so far because, as they say, necessity is the mother of invention. We had a number of insurance investors, as I've mentioned, from early on, from years ago. And after one of our recent commingled funds had ended its investment period, we had a not insignificant part of our investor base come to us and say, "Due to the capital charges, we are not going to invest in your next fund unless you can come up with a way that we get treated better."

And they're out there. We weren't the very first ones to do this. So they said, "They're out there, you should find them. We will help you. We want to invest with you, but we're not coming into your normal commingled fund."

And so the need for us to keep them as investors is what created, or what allowed for, those creative juices to get going and figure it out and figure it out in a hurry. And we were able to do that.

And I will tell you, we did it with their help. They sat down with us and identified what was important to the insurance investor, why it was important, what we had to watch out for. Now you include the rating agencies have to get involved. So there's a lot of folks that have a say and have some input into this.

So it was very important that we listen to our investors. And it was a reinforcing lesson for us because I think one of the things that I think I can confidently say about our investor base is we've really gone to where they need us to be, whether it's for tax purposes or geographic purposes, capital reserve charges in the insurance industry case, the number of vehicles that we've created and managed trying to meet their needs.

You said it very well earlier, we're going to invest the way we're going to invest and we can tell you what your portfolio is going to look like five years ago, five years from now. I can't tell you what's going to be in it, but I can tell you what the metrics are going to be around it.

And what we've been able to do also is say, we also can't tell you what vehicle or structure will work best, but if you tell us what you need, we're going to get very close to what you need, if not right on it, with your help as an investor.

And I think the insurance industry worked incredibly well with us and we're very appreciative of that because it's helped us not only grow our business, but maintain that investor base, those relationships that I think without some creativity we would've had to part ways.

Stewart: Yeah, no, that makes a lot of sense. I really appreciate it. What a great education on private credit markets. And you really delivered on the title, which is Challenges and Opportunities Facing Private Credit Investors. I mean, I think you landed 10 out of 10 on that. So great job.

I've got a fun one for you on the way out the door, which is, this is a little bit of a takeoff on an earlier question, but it's like, describe your best real or fantasy dinner. Who's coming? Where are you going? And what are you having?

Rick: Well, I'll start with my food. I love Cajun food. I love spice. So probably over a bowl of gumbo is where I would start.

And I think I would like to have dinner with, hopefully this sends the message of the type of person, it would be someone like a Jesus, Leonardo da Vinci, Christopher Columbus, Galileo, or Ben Franklin, somebody who was at the beginning of something that saw what no one else saw or had a vision or an idea or thought differently.

And I think those kind of people tend to, I'm sure there's modern examples of that in the AI world or the software world. I guess because they're more around and we see them on TV, it's maybe not as mysterious or maybe not as even interesting. But when you read history and you read about how we got to where we are and why we act the way we act, I'd like to understand what they saw and how they saw it and maybe what they think about how we've done with it.

Stewart: Very cool. I really appreciate you being on. It was a great discussion and great education, Rick, and thanks so much for taking the time.

Rick: Thank you. Thanks for having me.

Stewart: We've been joined today by Richard Miller, who goes by Rick, Managing Director and Chief Investment Officer of the TCW Private Credit Group. If you like what we're doing, please rate us and review us on Apple Podcasts, Spotify, or wherever you're listening to your favorite show. You can also watch us on our YouTube channel at InsuranceAUM Community. My name's Stewart Foley. This is The Home of the World's Smartest Money on the InsuranceAUM Podcast.

The InsuranceAUM podcast is available on

Share this post

Contacts

---

TCW

Image

 

TCW has a dedicated insurance platform that is fully integrated with our dynamic investment management platform, which has served investors for over 50 years, enabling clients to evaluate opportunities through both an investment and insurance lens. The firm’s insurance portfolios incorporate a full range of solutions that can be customized as individual strategies or designed to function together within a diversified general account framework.  

Combining insurance-focused expertise, specialized infrastructure, and analytical capabilities, the platform helps insurers address portfolio construction, capital efficiency, regulatory considerations, statutory reporting, and balance sheet optimization as part of the investment process. By integrating these capabilities into a single client experience, TCW provides insurers with a more comprehensive approach to managing assets and liabilities. In a market where many managers offer insurance-compatible products, TCW distinguishes itself through the depth of its insurance-focused resources and its ability to support insurers holistically as regulatory, reporting, and capital requirements continue to evolve.

TCW is a global asset manager with $200 billion in assets under management as of June 30, 2026, offering innovative strategies across fixed income, equities, and alternatives to diverse insurance clients. 
 

TCW
515 South Flower Street
Los Angeles, CA 90071
insurancesolutions@tcw.com
 

View the contributor page