The agreement comes as wealth managers are continually urged to allocate investments to the private markets space and capture superior returns over the long term.

Blackstone, the private markets titan, is reportedly joining with the insurance company Resolution Life to give Blackstone more than $60 billion in new assets to manage.

Under the deal, Blackstone will invest $500 million in Resolution Life and help it raise roughly $2.5 billion more, an October 12 report in the Wall Street Journal said. This will give the privately held insurer more resources to acquire new blocks of policies in the reinsurance and life-and-annuities sectors.

The report said Blackstone will manage Resolution Life’s illiquid investments in such areas as private credit, private real estate and asset-based finance. The arrangement will add as much as $25 billion to the private-equity firm’s assets under management in the first year and is expected to contribute a total of more than $60 billion over the next six years, it said.

The agreement comes as wealth managers are continually urged to allocate investments to the private markets space and capture superior returns over the long term – an important consideration at a time of high inflation and concerns about faltering global economic growth.

The WSJ report noted that the Blackstone/Resolution Life deal is the latest example of a private equity firm linking up with an insurer to secure more assets to manage and of an insurer handing over management of its assets in search of higher returns. Blackstone has made similar partnerships with F&G, part of Fidelity National Financial, a former life-insurance unit of Allstate Corp, and Corebridge Financial, the life-insurance and retirement services unit spun out of American International Group.

Blackstone, due to report third-quarter earnings next week, managed $941 billion in total as of the end of the second quarter.