Private Equity Comes With Dollars But Also Some Questions
March 8, 2022 by Steven A. Morelli
If you’re thinking that there seems to be a lot of private equity behind the annuity business these days, you are not wrong.
For example, in the fourth quarter of 2019, just before the pandemic struck, private equity-owned companies accounted for 26.7% of fixed index annuity sales, according to data from Moore Market Intelligence. By the third quarter of 2021, that percentage rose to 41% of $17.3 billion in sales.
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While admiring the returns, the higher risk part of the proposition worries veteran observers such as Sheryl Moore, CEO of Wink Inc., a data analysis company. Securitized debts and similar investments remind her of the risky instruments that helped paved the way for the 2008 financial collapse.
Moore added that she is not an expert in those financial instruments, but has seen risky behavior that accelerated growth for some companies. She herself had to rescue her own annuity when a company went into receivership and “lost” her contract.
