At RGA, our investment mission is to drive stable investment income over the long term, pursuing value while managing risk to support RGA’s financial strength. Investments is an integral strategic partner in developing client solutions and enabling business growth globally. The largest portion of the Investments team is based in St. Louis, with additional key members located in London, Singapore, and our nine regional real estate offices in the U.S. and Canada. We also access a stable of external managers to supplement broad internal capabilities.
In 2019, RGA Investments successfully delivered on a multi-year plan to expand capacity and capabilities globally. In our London office, for example, the team took significant steps to strengthen operations and establish a more substantial, sustainable base from which to achieve long-term goals in the EMEA region, including increasing RGA’s access to mortgages and infrastructure assets in the U.K. and Continental Europe.
Ultimately, expansion of our investment platform is directed toward one primary goal: empowering RGA’s ability to deliver client solutions. To that end we have built dedicated in-house real estate and private debt and equity platforms to gain direct access to those private markets. We have also applied our existing expertise in new ways, opening up new opportunities for RGA’s financial solutions business. For example, in 2019, when a leading insurer in Canada sought to execute a complex real estate-related capital-solutions transaction, our commercial real estate team provided critical expertise and due diligence to successfully close the transaction.
Moving forward, RGA investment professionals will continue to collaborate with reinsurance experts to optimize in-force business, reallocate assets in acquired portfolios, and facilitate new transactions. We remain committed to strengthening and diversifying our investment operations to make delivering these solutions possible.
Management of Assets
As of December 31, 2019
Fixed-Maturity Securities Credit Rating Distribution
As of December 31, 2019
Annualized Growth in Assets Under Management
(in billions USD)
(10-year CAGR, 2009-2019)
RGA Builds Strength in Private Asset Classes
Private Debt & Equity
Launched in 2013, RGA’s Private Debt & Equity (PD&E) team applies deep in-house credit and equity investment expertise to develop custom financial solutions for our private equity partners across a wide spectrum of industries. By providing capital to help finance entrepreneur-led companies’ growth and expansion projects, PD&E advances RGA’s investment strategy in two important ways: diversifying investments through a less accessible asset class and increasing the yield on RGA’s overall portfolio.
Consistent focus and broad experience in the lower middle market enables our team to identify unique investment opportunities. Building on private equity fund investments and sponsor relationships, our skilled investment professionals leverage deep buyout sector expertise in our target markets to help craft flexible capital structures for our partners through an array of credit and equity solutions, including senior and subordinated loans.
In 2019, PD&E closed $330 million of new loans and made commitments to lower middle market private equity buyout funds totaling $167 million. Through a consistent commitment to building strong client relationships, our team has built a recognized brand and ended 2019 with a portfolio of more than $1 billion in assets under management.
Commercial Real Estate
After years of sustained growth since launching in 2011, ReCap, RGA’s commercial mortgage loan and real estate team, consists of more than 50 associates located in our home office in St. Louis and across nine regional offices in the U.S. and Canada.
Commercial mortgage loans have long been a core investment for life insurance companies due to their stability and strong relative value. RGA’s regional office model further enhances investment returns, combining local real estate expertise with investment class benefits to deliver more than 100 basis points of excess return as compared to corporate bonds of similar credit quality and tenor. These returns are optimized through ongoing growth in our mortgage portfolio, which exceeded $5.7 billion at the end of 2019.
Our team also leverages expertise to generate meaningful returns via joint venture partnerships. At the end of 2019, RGA held 41 real estate investments in 18 states and 24 metropolitan areas, a portfolio totaling more than $547 million and targeting internal rates of return in the mid-teens.