US regulators warn on KKR and Apollo ‘circular’ risk 

Financial Times UK 1 Aug 2026 LEE HARRIS IN LONDON AND ERIC PLATT 

US reg u lat ors are sound ing an alarm over risks of “cir cu lar own er ship” and opaque hold ings in fast-grow ing fin an cial struc tures used by private cap ital groups includ ing Apollo and KKR. 

The warn ing, set out in new doc u ments from the stand ard-set ting body for US state insur ance reg u lat ors, cuts to a grow ing con cern that the invest ments filling insur ance bal ance sheets could har bour greater risks than poli cy hold ers or investors per ceive, as the industry invests vast pro ceeds from premi ums in private mar kets. Greater dis clos ure or cap ital require ments could blunt so-called multi-asset secur it isa tions, invest ments that often slice and dice stakes in a hand ful of funds. They can own any thing from credit card debt and mort gages to private equity fund stakes and dir ect loans to middle-mar ket com pan ies. 

Asset man agers have pitched this fast grow ing corner of fin an cial mar kets as more luc rat ive than tra di tional struc tured debt while still win ning pristine rat ings from the big credit agen cies. Life insurers have been study ing and invest ing in these secur it ised debt deals as they look to bol ster the returns they mar ket on annu it ies they sell to retir ees. 

The com plex ity, lack of trans par ency in the products and their poten tial to cre ate “inter con nec ted ness” between the bal ance sheets of sep ar ate insurers, have raised con cerns for state reg u lat ors, accord ing to doc u ments released ahead of the sum mer meet ings of the National Asso ci ation of Insur ance Com mis sion ers, a stand ardset ting body. While the NAIC is not a reg u lator, state insur ance reg u lat ors attend its meet ings and organ ise work ing groups to co-ordin ate industry stand ards. 

Although multi-asset struc tures are some times backed by col lat eral of higher qual ity than other fin an cial products with sim ilar credit rat ings, reg u lat ors were con cerned the assets had “greater poten tial to cre ate inter con nec ted ness between and within insur ance com pany port fo lios”, the NAIC memo said. People famil iar with an NAIC work ing group lead ing the work said its focus on these types of invest ments included Apollo Multi-Asset Prime Secur it ies, a struc tured credit product that Apollo built for its insurer Athene, as well as KKR secur it ised asset and private equity funds such as “Thun der bird” and “Light ning”, in which KKR’s insurer Global Atlantic has inves ted.

 Apollo said its multi-asset secur it ies have diverse hold ings and highly rated col lat eral with less lever age and have been reviewed by reg u lat ors. “Those who view AMAPS as adding risk are, unfor tu nately, clearly unin formed,” Apollo said in a state ment. KKR declined to com ment.