Insurers Investment Club - Conversation & Breakfast

Presentation: Unlocking Opportunities for Insurers in US Direct Lending

Speakers: David Gaito, Head of Direct Lending and Matteo Ricciarelli, Insurance Client Solutions Director at Fidelity International

Direct Lending has developed into a popular asset class for many insurers, offering higher yields, diversification benefits, strong contractual protection and solvency efficiency.

In this breakfast, we will cover:

• Why US Direct Lending remains a compelling asset class for UK and European insurers.
• Why Fidelity's focus on the lower-middle market aligns to insurers' needs for security and yield enhancement.
• How the team is positioning the portfolio given upcoming economic headwinds.
• How insurance investors can access the strategy and benefit from favourable investor terms.

Fidelity Direct Lending Platform:

• Fidelity launched a middle-market, sponsor-backed senior secured direct lending platform in early 2021 as a natural extension of its sizeable and long-tenured leveraged credit platform with over $90bn in AUM.
• Since then, the platform has grown to over $6bn AUM and closed nearly 89 investments with 50 unique sponsors, earning a net IRR of 13.8% in USD since December 2021.
• The Chicago-based team has grown organically to over 30 investment professionals and typically sources deals in the lower to core middle market segment.
• Fidelity will launch an evergreen vehicle available for non-US investors in 2025 - an unlevered version of their US Direct Lending strategy, with the opportunity for early investor preferential fees.

David Gaito - Head of Direct Lending

David is Head of Direct Lending in the High Income and Alternatives division at Fidelity Investments. David leads Fidelity’s direct lending business, which is focused on making credit investments to middle market companies predominately owned by private equity firms. Prior to joining Fidelity, David held several senior roles during a distinguished career at PNC Corporate and Institutional Banking.

He was most recently an executive vice president and division executive for PNC’s middle market senior secured lending platform, with responsibility for managing the daily operations of a division that included the Boston, Chicago, New York, and Toronto hubs. In this capacity, he was responsible for all aspects of the division’s credit management and new business origination. David has an extensive track record in leading divisions, acquiring talent, and mentoring employees to grow assets under management. He brings over 20 years of expertise to the role and has been in the financial industry since 1999.

David earned his Bachelor of Science degree in economics from St. Vincent’s College. He is also a CFA® Charterholder.

Matteo Ricciarelli- Insurance Client Solutions Director

Matteo joined Fidelity in June 2023 and is leading the development of insurance and pension focused analytics and portfolio construction models. Matteo started his career leading implementations of the Algorithmics IBM models for Solvency II and Swiss Solvency Test purposes at main multinational insurance groups in Europe and the UK. He then led the development of Economic Scenario Generators at Willis Towers Watson, where his team was responsible to provide risk calibrations to insurance, pension funds and sovereign wealth funds globally. More recently, Matteo served as insurance solution strategist at Goldman Sachs Asset Management, where he developed Strategic Asset Allocation and portfolio construction frameworks for insurance firms and pension funds in EMEA and at PwC where he advised insurance firms acquiring pension defined benefit pension schemes on ALM, investment strategies, internal credit rating and internal modelling of complex fixed income assets. He has over 15 years of insurance experience.