Good afternoon, and thank you, everyone, for joining the webcast today. I'm Mike Nolan, President of FNF, and I'm joined by Tony Park, our CFO, as well as the team at F&G and members of Blackstone. First, I wanted to make some introductory remarks before we jump into the presentation. Overall, we remain very excited about the F&G acquisition, which we closed ahead of schedule at the beginning of this month, and we recently welcomed all of F&G's employees and policyholders into the F&S family. Over the past weeks and months, we've had a number of conversations with many of our investors and analysts to continue to educate you on F&G's business. We think these conversations have been productive, and investors and analysts have walked away with a better understanding of F&G's business model.
One of the topics we've often received questions on is F&G's investment portfolio, including what's in it, how it's managed, and how the relationship with Blackstone works. Today, we wanted to take the opportunity to provide an overview of the investment portfolio, as well as allow you to go deeper. We want you to hear directly from the key decision-makers and allow you to ask questions of F&G and Blackstone. We think the Blackstone relationship is one of F&G's key competitive advantages, and we want you to understand how the investment process works. We hope this is productive and time well spent. Now, I'll turn it over to Tony Park, CFO of FNF.
Thank you, Mike. As Mike said, we want to give you the opportunity to ask questions of the key decision-makers at F&G and Blackstone. Chris Blunt, F&G's CEO, and Raj Krishnan, F&G's CIO, have invited the head of Blackstone's insurance platform, Blackstone Insurance Solutions, which we call BIS, as well as the lead portfolio managers for Blackstone's credit platforms that manage F&G's investment portfolio to offer their insight. We encourage you to use the webcast Q&A tool to submit questions. Chris will receive these questions real-time, and we have reserved time slots after each of the individual Blackstone deep-dive sessions for your questions that Chris will moderate.
One final note: this information is provided for shareholders of F&S for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any security or instrument or a solicitation of interest in any particular Blackstone fund, account, or strategy. Important notes and other information with respect to these discussions is included in the written slide materials, which are posted on the website and should be reviewed carefully. With that, I'll turn it over to Chris Blunt, CEO of F&G.
Thanks, Mike and Tony, and good afternoon, everyone. I've had the pleasure to speak with many of you listening in on the webcast over the past few weeks, and one of the things you asked for is to go deeper on the investment portfolio. Today, Raj Krishnan, our Chief Investment Officer, will talk about our general account investment strategy and the strategic decisions we've made over the last couple of years. Afterwards, Gilles Dellaert, Senior Managing Director and the Global Head of Blackstone Insurance Solutions, will provide you with an overview of Blackstone's insurance platform. We will then be joined by the lead portfolio managers from Blackstone's credit platforms, who will share insights on their strategy and provide you with more detail on the assets that are being sourced and managed on behalf of F&G.
First, I'd like to focus on what we hope you take away from today's presentation, and that's this: One, we feel comfortable and confident in the credit soundness of our investment portfolio. Like Blackstone, we're focused on downside protection and playing defense rather than offense. Two, Blackstone's ability to source proprietary investment-grade private debt is a key competitive advantage for F&G. This has provided excess investment spread of over 200 basis points over investment-grade corporate bonds for these assets. We believe this drives a yield advantage for us relative to competitors while not taking on incremental credit risk. Third, the partnership with Blackstone allows us to leverage the breadth and depth of the entire Blackstone ecosystem. That means that while we have a relatively small in-house investment team led by Raj, we are able to leverage 226 of Blackstone's highly experienced investment analysts and portfolio managers across their platforms.
Blackstone's insurance platform, Blackstone Insurance Solutions, is tailored to managing insurance company general accounts, and BIS supports our risk objectives and regulatory framework. And F&G's team maintains control over strategic asset allocation, which is driven by our stable liability profile, while Blackstone is responsible for decisions at the individual security level. Next, I'll focus a little bit on our distribution and how we source our liabilities, as well as our spread business model. I'm proud to say that following the close of the F&F transaction, we received ratings upgrades from S&P, Fitch, and Moody's. The close of the deal accelerated our already strong ratings momentum, and these upgrades will help jump-start our launch into the broker-dealer and bank channels. Additionally, I'm excited about rolling out distribution in a large independent broker-dealer later this month. We have strong and long-tenured relationships with our current distribution in the independent channel.
In the first quarter of 2020, we were third in market share for both fixed index annuities and multi-year guaranteed annuities in the independent channel. Our core annuity products are two different versions of fixed annuities. These are fixed index annuities, or FIAs, and multi-year guaranteed annuities, or MIGAs. I thought I would take a second to walk through each of these products at a very high level. With an FIA product, rates credited to the policyholder are tied to a market index. The policyholder is guaranteed a rate of return of 0%, meaning they can't lose money due to market declines, and they can participate in the upside to the performance of an index. From our perspective, we essentially invest the policyholder's deposit in fixed income and buy an option on their behalf. It's straightforward to hedge that market risk, and our policyholders are protected from market losses.
The inherent guarantees of our FIA products are built exactly for times like these. With a MIGA product, we guarantee a specific rate of return for a specific time period. For example, a five-year MIGA may currently credit the policyholder a fixed rate of 2.5% over that period. In both cases, for the FIAs and MIGAs, the products are tax-deferred. So our two main products are effectively insurance company versions of a bank CD: very stable and predictable liabilities where we earn the spread between the yield on our investment portfolio and the cost of those liabilities. It is important to understand our stable and predictable liability profile. We have a young book of business with significant surrender charge protections. Core product pricing is reset monthly, and we're able to utilize various levers to continue to achieve our targeted returns.
Our ability to generate stable liabilities allows us to optimize our investment allocation with attractive private asset classes. We favor complexity and liquidity risk over credit risk, which matches well with our liabilities, and we maintain tight asset and liability matching to reduce our exposure to interest rates. Now, all of this is translated into a long track record of managing our net investment spread. Despite volatility in Treasury yields, our net investment spread has remained very stable over time. The first quarter of 2020 was a great example of that, where we had one of our best quarters in terms of net investment spread. Despite the nearly 125 basis points decline in the 10-year Treasury yield in the quarter, we were able to expand FIA net investment spread by 51 basis points versus the prior year quarter.
So with that, I will now turn it over to Raj Krishnan, our Chief Investment Officer at F&G, to share with you how we view asset allocation and our repositioning actions we've taken over the past couple of years. Raj?
Thank you, Chris. For my comments today, I will provide an overview of how our liability profile has informed our activities around the repositioning of our investment portfolio, the competitive advantage that we enjoy through our partnership with Blackstone, the resources at F&G and Blackstone that support our investment activity and how we delineate roles and responsibilities, our current portfolio positioning and asset allocation, and I'll wrap up by reviewing the severe stress analysis that we presented with our first quarter 2020 earnings. Asset allocation decisions for the investment portfolio begin with a deep understanding of our liability profile. Our annuity business is a relatively young block with high surrender charges. These surrender charges make these liabilities more difficult to be put back to us.
Given the stickiness of our liabilities, we can consider the role of illiquidity and complexity risk instead of solely relying on credit risk to earn our targeted net spread. As such, we are able to better diversify the sources of net investment income to support the business. Our view, starting in late 2017 and early 2018, was that the credit cycle was getting long in the tooth, which would place downward pressure on the creditworthiness of the most liquid corporate bonds. So to that end, we made the conscious decision to reduce tail risk in the portfolio by allocating away from corporate bonds, primarily BBB and single-A rated issues, in favor of high-quality, primarily investment-grade rated structured securities.
This decision was predicated upon a longstanding knowledge of the company's liability profile, as well as our comfort with Blackstone's established track record in structured credit and private assets over multiple market cycles. Furthermore, the partnership with Blackstone has allowed us to add proprietary investment-grade private debt instruments, primarily structured ABS-type assets that were sourced directly by Blackstone for F&G. This proprietary product offers a meaningful excess investment spread to similarly rated corporate bonds, and that translates to a yield advantage for F&G that also provides superior downside protection relative to traditional corporate bonds. In a low-rate environment, such as the one we are in today, the excess investment spread that is generated by these activities allows us to maintain and ideally expand our competitive advantage as we continue to grow existing channels and enter new channels, such as the institutional market.
With Blackstone, we can build, not just buy assets, but fit our liability profile, and we view this as a competitive advantage. Gilles will provide you with more context on Blackstone's scale, scope, and capabilities, as well as walk you through Blackstone's insurance platform in a moment, but I'd like to touch upon the responsibilities of both F&G and Blackstone in this partnership to properly set the stage for the deep dive that the Blackstone team will provide later in the discussion. As you can see in the bottom right of the slide, F&G's Chief Investment Office has oversight and responsibility for all investment activity to support the company. These include setting tactical and strategic asset allocations within prescribed capital and target spread bands, as well as overseeing the hedging program to support the liabilities that the company originates.
These target portfolios fall under the purview of F&G's own investments and risk teams that assess portfolio monitoring, stress testing, and capital optimization. In periods of heightened volatility, such as what we've experienced over the last few months, these conversations are occurring real-time. Oversight for these activities occurs at the F&G Investment Committee and is further supported by F&G's executive and risk committees, as well as by Blackstone Insurance Solutions' risk team. It's a true partnership. The Blackstone Insurance Solutions team operates like an extension of our own Chief Investment Office. Our Chief Investment Office works closely in partnership with Blackstone Insurance Solutions, BIS, in the management of F&G's investment portfolio. The BIS teams at Blackstone are responsible for drawing on all the resources of Blackstone to deliver and execute F&G's desired investment strategy.
This requires BIS to leverage the breadth of Blackstone's investment capabilities, including credit, real estate, specialty finance, and alternatives. At the top, BIS includes over 40 professionals dedicated to managing insurance general accounts. This provides F&G with the ability to leverage BIS's expertise in capital optimization, analytics, risk and oversight, and ongoing monitoring of the portfolio. But importantly, in addition to BIS, we at F&G have the ability to leverage 226 industry-leading credit analysts and portfolio managers across the entirety of Blackstone's structured credit platforms. We view this resource capability as another competitive advantage. I'd like to turn to a snapshot of the portfolio. The investment portfolio is well matched against our liabilities and widely diversified across asset classes, including what you typically see in companies like us: corporate bonds, municipals, and the like, as well as larger allocations to specific asset classes where our investment partner has leading capabilities.
You know Blackstone is a leading manager of alternatives. Alternatives, including private equity, private real estate, and private credit, make up approximately 4% of the portfolio. Over time, we expect to build the alternative allocation of the portfolio to around 5%. We sit here, however, with over half of our alternatives allocations undrawn. It's a good spot to be in as we survey the market at hand. But for today's deep dive with the Blackstone portfolio managers, we will focus on just under one-third of the investment portfolio made up of predominantly investment-grade structured securities, including CLOs, CMBS, and private ABS, in areas where our allocation is predicated on our knowledge of our liability profile, as well as our comfort with the capabilities of our manager.
This is where we have received the most questions on the portfolio and want you to hear directly from the teams who are delivering these asset classes to our business. So lastly, before I turn over to Blackstone, I wanted to review the severe stress test results we shared with you during our first quarter 2020 earnings. I would note that credit and equity markets have recovered materially since March when we first ran this analysis, and I'd reiterate that this severe stress test in no way reflects our expectations for actual future impairments at this point in time. Nevertheless, given the uncertainty regarding COVID-19, we've received questions of potential impacts in a severe recessionary environment, and the risk teams at F&G and Blackstone have collaborated to present this severe stress scenario.
Regarding our assumptions, we modeled the recessionary environment based on the severe conditions of the 2008-2009 global financial crisis, and in addition, we've applied cumulative default rates and an instantaneous shock, which effectively doubled the observed annual default rates relative to the global financial crisis. We have refined our model, and our impairments are modestly higher by $9 million related to the CLO portfolio relative to the prior presentation. However, we continue to view the impact of book value and earnings as manageable, even before any management actions. We believe the company would remain well capitalized even in this severe stress scenario. In this scenario, we estimate total defaults of approximately $150 million after- tax, mostly driven by defaults in the corporate bond portfolio.
This is equivalent to roughly 50 basis points of the total portfolio and less than six months of earnings based on 2019 AOI, adjusted operating income, of $320 million. In addition, we estimate about $300 million after tax of unrealized losses from mark-to-market movements on our alternatives and preferred stock holdings. Unlike true impairments, we would expect the mark-to-market impact for alts and preferred stocks to recover over time as the market rebounds. So in total, we estimate approximately $450 million of impact to after-tax earnings in this severe stress environment, with two-thirds of this coming from assets that are mark-to-market as opposed to being permanently impaired. This is equivalent to approximately 160 basis points of the total portfolio. The roughly $450 million of after-tax impact on the portfolio is about 1.4 times our full year 2019 adjusted operating income of $320 million.
This compares to the moderate stress scenario presented in the first quarter of 2019, which reflected an impact of approximately one times after-tax earnings. We view these results as manageable within our liquidity and capital framework, both of which are informed primarily by our deep knowledge of the stable liabilities in our books and that we continue to write. We also view these results as supportive of our decision to rotate out of the most vulnerable liquid corporate bonds into high-quality structured assets and diligence underwritten and sourced by our investment partner, Blackstone, who has deep experience in these asset classes, and with that, I'll turn it over to Gilles Dellaert, Senior Managing Director of Blackstone and Global Head of Blackstone Insurance Solutions.
Raj, thank you, and good afternoon, everyone. Very much appreciate the opportunity to speak to you all today about the strategic partnership between F&G and Blackstone. I will spend the next few minutes providing background on Blackstone as a leading alternative asset manager and explain the role of our insurance investment management business, BIS. Before I turn it over to my colleagues, we'll go into more detail on our credit and real estate platforms that we leverage to support F&G's business model. Our goal is for you to come away from today's webcast with a better understanding of Blackstone and how we partner with and manage assets on behalf of F&G. Since its inception, Blackstone's primary goal is to deliver excellent investment returns to our clients. What sustains us as a firm is our performance over the past three decades.
Our focus is on delivering superior performance for our clients and preserving their capital. We strive to build a sense of partnership over the long term by preserving capital, protecting the downsides, and delivering strong returns through market cycles. This philosophy is a natural fit for long-term insurance investors like F&G. The firm's global reach and network provide access to relationships, insights, and deal sourcing that give us an advantage. Our size and scale across different businesses allow us to participate in deals where others can't compete. Our real estate and private equity businesses are both global leaders. In our real estate business, we are one of the largest buyers, sellers, and financiers of real estate in the world, with $161 billion in investment capital under management.
The scale of the business across the capital structure provides a unique information edge when investing in the commercial mortgage-backed security sector, which we will discuss later. The private equity businesses span a wide variety of industries and continents in businesses large and small, with approximately $110 billion in assets under management. Over the years, we've established additional franchises in more opportunistic private equity through the tactical opportunities business and secondaries through our strategic partners business. GSO Capital Partners is part of the global credit investment platform of Blackstone, which has $129 billion in assets under management and is one of the largest private credit investors globally. As an insurance asset manager, the credit business is a large part of our strategy, and we will spend some more time on GSO shortly.
Finally, Blackstone's hedge fund solutions platform is one of the world's largest discretionary investors in hedge funds, with approximately $74 billion in assets under management. As a firm, Blackstone has $538 billion in AUM across the board. The scope of our business truly creates unique investment opportunities, and the core of our Blackstone Insurance Solutions strategy is to bring these capabilities to the insurance industry. Today, we manage close to $60 billion of assets for insurance clients, with F&G as our largest client, making up a little bit more than 40% of that. Within BIS, we have more than 40 dedicated professionals across portfolio management, risk management, finance, operations, regulatory, and legal and compliance functions. We operate as an extension of our clients and as an interface into Blackstone. Insurance is a rated and regulated business and has unique needs and considerations.
The role of BIS is to understand and serve those needs and to help our insurance clients best meet their policyholder obligations. We do this by leveraging Blackstone's credit and real estate platforms and our diversified suite of alternatives to deliver exceptional investment results. There are a significant amount of financing activities occurring across Blackstone. In 2019, we originated, traded, and issued over $180 billion in debt. This puts us in a unique position to source attractive credit assets for an insurance investment portfolio. We are focused on credit markets where we believe capital is less prevalent, and we can capture an investment premium for accepting illiquidity and complexity, which we are well positioned to underwrite given the breadth of our platforms and our proven underwriting expertise. We access these markets through our GSO credit business and our real estate debt teams.
As Chris highlighted earlier in his key takeaways from today, our teams are sourcing primarily investment-grade rated assets for F&G, including proprietary investment opportunities across the platforms. Our teams are larger, more experienced, and better positioned to do so than most insurers that do this in-house. This translates into a more in-depth understanding of these sectors, stronger bottom-up underwriting, and ultimately higher investment conviction. Structured credit is evaluated from the ground up on a loan-by-loan basis, deciphering between good collateral and bad collateral and evaluating the nuances of structure. For CLOs, this means we have underwritten and have a view on each of the underlying leveraged loans in any deal, and for CMBS, this means having a view on each of the underlying mortgage loans and properties.
Our teams invest in a disciplined way by leveraging knowledge across Blackstone, by conducting the detailed credit work, and by understanding the illiquidity and complexity premium we are taking on. This approach has resulted in lots of experiences across both platforms that are well below market average. Now I'm going to turn it over to Dan Smith, Senior Managing Director, who oversees GSO's liquid credit strategies, to go into more detail on our credit capabilities.
Thank you, Gilles. I just continue on the introduction a little bit. I've been with the firm since its inception in 2005. As Gilles said, I oversee the liquid credit part of the business, which accounts for roughly half of GSO's AUM, and I've held this position since the firm began. The objective of my presentation today is really just to provide you with a brief introduction to GSO, the CLO asset class, and what we do on behalf of F&G managing this part of their portfolio. My hope is you come away from this conversation with a better understanding of GSO and CLOs, but most importantly, why we believe the allocation to CLO debt tranches within the F&G portfolio to be very rational, very secure, and that there's no better partner than Blackstone for F&G to employ for this asset class.
As was said, GSO is a credit investing business within Blackstone. Specifically, we are focused on corporate credit with an emphasis on below investment-grade companies in the U.S. and Western Europe. We invest in all parts of the corporate credit markets: public, private, performing and distressed, floating and fixed rate, senior secured, and deeply subordinated, as well as in cash, synthetic, and structured form. We do this through many different fund structures and on behalf of institutions and individuals. The vast majority of the capital we manage, in excess of 90%, comes from large, sophisticated institutional investors from around the world and includes F&G. As is characteristic of all Blackstone investing businesses, GSO is highly focused on what it does. It is a market leader in the asset class we invest in and has considerable scale.
These features allow us to attract and retain the best talent in our discipline, focus our considerable resources on a specific asset class such that we have unrivaled knowledge and expertise and systems, and have a capital base that is large enough and flexible enough to allow us to execute on investment opportunities in ways that many of our competitors cannot. In the world of GSO, liquid credit is defined broadly as the part of the corporate debt markets that are syndicated and traded. This includes investment-grade and high-yield bonds, bank loans, syndicated bank loans, and structured corporate credit, namely CLO tranches. The engine that drives these activities for the liquid credit business is our team of 35 credit analysts who are responsible for determining which companies are creditworthy and continuously monitoring their performance and credit risk.
Our portfolio management teams use the information and knowledge provided by this group to make daily decisions as to what companies should or should not be in our clients' portfolios. Our guiding investment principle, as is the case for all Blackstone's investing business, is the preservation of our clients' capital. We believe if you do a good job of protecting capital, then returns tend to take care of themselves. Relevant to what we do for F&G in regard to managing the portfolio of CLO debt tranches, you should note the following. We're one of the largest investors in bank loans, syndicated bank loans globally. We're one of the largest issuers and managers of broadly syndicated loan CLOs globally, and we are one of the largest investors in CLO tranches, namely below the AAA level.
As you will see in the next slide, when it comes to CLOs, we have the asset class around it and why we believe this is an important advantage. The CLO is, for those of you not that familiar with the asset classes, a securitization of a portfolio of corporate bank loans. Unlike most other securitizations, the underlying assets are selected by a professional investment manager and acquired from the primary and secondary market for the purpose of the securitization and the CLO's investors. The investment manager is responsible for not only building the initial portfolio but actively managing it during the life of the CLO, and the objective is to minimize losses and maintain compliance with the CLO structural requirements.
Additionally, there's a high degree of transparency both in terms of information about the actual portfolio underlying the securitization and the structure itself that is provided every month by an independent trustee. Most other securitizations include a pool of assets sourced from one or several originators. They're not selected, and individual borrower data oftentimes is limited to ZIP code, credit score, LTV, and only known at inception, and the structures are static and not managed. So CLOs are very differentiated in that regard. As you can see from the diagram on this page, bank loans, which are the senior-most debt of the below investment-grade capital structure, are accumulated by the manager into a well-diversified portfolio, typically containing 200-plus issuers representing most all the industry groups.
That portfolio is then acquired by the CLO and financed via the proceeds of the securitization or the issuance of CLO liabilities and equity, as you can see on the right. Two things to highlight: bank loans typically represent the top roughly 50% of a company's capital structure and are the first in line for repayment and secured by company assets. In different terms or more familiar terms, let's refer to this as a 50% loan to value or LTV. These bank loans are then pooled and securitized, where additional protection is added depending on the level of the debt tranche and the CLO being considered. As a result of the securitization process, an added layer of credit protection is created that is incremental to that that's provided by the subordinated capital at the company level.
For example, in this simple illustration, assuming a single loan is included in the securitization, which has a 50% LTV, if you own the single A-rated tranche of the CLO, you've improved the LTV of the loan from 50% to 32%. Lastly, CLOs can offer a meaningful yield and return premium to similarly rated corporate bonds or loans. We believe the premium, as was previously indicated, is a result of complexity and liquidity relative to that comparably rated corporate debt. F&G, and we believe they have the capital base that is well suited to the less liquid investment strategy, and that Blackstone has the capability to understand and manage the additional complexity well. Now that you have the basics of a CLO, I'll walk you through our approach and process that we go through when investing in these debt tranches.
As we do this, hopefully, it becomes very clear why we feel GSO has a distinct and significant advantage when investing in CLO securities. First, we start with a detailed assessment of the underlying loans in the CLO or the CLO's assets. Our CLO investing team uses the information and knowledge generated by our 35-person credit team to come up with a granular view of the quality of the portfolio and to identify potentially risky loans and whether it's credit risk or otherwise that we need to be aware of when we invest in the structure. This assessment includes the potential default and downgrade risk of each bank loan where we have active coverage of the company. We have a proprietary fundamental credit database and technology platform that allows this analysis to take place with a few clicks.
Remember, we're one of the largest bank loan investors, so we have a view on most of the traded loans out there. Given these portfolios are actively managed, they'll change over time, so we have to constantly update this analysis each month when the trustee reports are issued. Because the portfolios are actively managed by a professional investment manager, we have to consider the positive or negative impact that the manager can have on the CLO. Diligencing the manager and having a view as to their capabilities and behavior is therefore very important. We talk to them regularly, and we compare their decisions that they are making in their portfolios to our own. We also have the ability to compare the decisions they're making to what they tell us their strategy and approach to investing are.
We can often tell you what a manager's style and approach is without even talking to them via this type of analysis. The manager analysis is also helpful to our loan and CLO portfolio management team. Knowing what your competitors are doing is always helpful. This type of synergy is important when understanding our motivation for wanting to be a top investor in CLOs and the amount of resources that we dedicate to this function. Additionally, as the largest manager of CLOs in terms of the actual structures, we understand well the challenges that come with that, making sure that your portfolios are complying with the constraints of the CLO structure and you're minimizing risk and maximizing return. Chances are, if we are experiencing pressure points, so are other CLO managers.
We can tell the CLO investing team what the issues are, and they can look at the CLOs that we own for the same concerns. If they see it, they can call the manager and ask them what they plan to do about it or even help them come up with a plan if they don't have one. Please note, just as you think about investing in CLOs, the higher up in the CLO capital structure you are, i.e., the higher the rating on the tranche you're investing in, the more removed you are from the actual underlying credit risk because you have a thicker and thicker layer of protection, and therefore, the credits in the portfolio and the manager become a little less important.
Lastly, the structure and documents of the CLO that govern how the waterfall works and what the manager can and can't do are important to understand. These documents are very complicated, and as the largest manufacturer of CLOs ourselves, we're very much in the know as regards to the structural issues. We're oftentimes directly in dialogue with the investors in our own CLOs and understand what the concerns are and what we have to do to address them in terms of how we structure these transactions. Most of our competitors will receive a stack of CLO documents and review them to try and figure out the nuances of a particular structure and what the changes are over time from deal to deal.
As a frequent issuer, we are at the nexus of these changes, and the dialogue between ourselves, the CLO sponsor manager, and CLO investor keeps us well informed of what's happening in regards to structures. Because I've emphasized the importance of knowing the individual assets when investing in CLOs, I thought it would be helpful in terms of establishing our credibility in this regard to share with you our 22-year track record for investing in loans. Specifically, what's shown here is our default, recovery, and loss information for all the loan portfolios that we've managed since June of 1998. This includes time before GSO when the team that is now at GSO had started managing loan portfolios. During that time, we experienced an average annual default rate of 42 basis points compared to 277 for the loan universe.
When we had a default, we recovered 70.3% of our investment versus the market average of 60.6%. Remember, bank loans are at the top of the capital structure and secured by assets and first in line to get repaid, which is what supports these higher recovery rates. The combination of these two things is the average annual loss rate, which for us has been 12 basis points versus 109 for the loan universe. There's a couple of takeaways from this. One, hopefully, that you can see we know how to lend money, and we know who to lend it to, and if we make a mistake, we do a good job of getting our money back. When we are looking at what loans are in a CLO, we have a very good idea of which ones are going to be a problem.
Additionally, what you should take away from this is typically managers add value in terms of CLO structures and can reduce the losses experienced by the portfolio relative to just a market benchmark. Now, for the main event, what does F&G's portfolio of CLO debt look like? As you can see from this portfolio summary, the portfolio skews heavily to the investment-grade and more specifically single-A and better in terms of rating agency metrics. While ratings are important, I would like to focus your attention on the structural protection number of 20%. This is the average amount of capital that sits below us in the CLO structure based on where we're invested in these tranches, and we think this is a key measure of the actual risk that we're taking.
As an example, in this 20% structural protection, if you recall that prior example I used where we had the one loan CLO with an LTV of 50%, in this particular instance, with that average 20% par subordination, F&G's CLO portfolio would imply a 30% underlying LTV when you include both the company's capital structure and the CLO's capital structure. As we know, CLOs are not like our simple example, and instead of being comprised of one loan, they're made up of hundreds of loans. When we pierce the CLO structure and look at what is in each of the CLOs that F&G is exposed to and then aggregate that information up, you see the following. One, we're exposed to 94 different managers.
There are 1,500 companies represented in the underlying portfolios of these CLOs, with no one company representing more than 70 basis points of aggregate exposure, and we have a full spectrum of industries, with the largest being approximately 12% of the portfolio. So bottom line, this portfolio is highly diversified, which is a key risk mitigator. In an attempt to try to bring all this together and put this into context, we've pulled together a CLO impairment frontier, which attempts to show how resilient the different tranches of the CLO structure are under different default and recovery scenarios. In this graph, you can see the X-axis is the recovery rate in the instance of a default. So recall, I said ours was 70.3%, and the market was slightly above 60% on average. The Y-axis represents the constant annual default rate experienced by the CLO portfolio.
For example, if it was a 3% CDR constant annual default rate, that means that for every year the CLO is outstanding, 3% of the par value of its portfolio defaults every year. Simply, if the CLO has a five-year life, then approximately 15% of the portfolio defaults over that period of time in the 3% constant default rate scenario. Each line on this graph represents the point at which a given tranche along the default recovery continuum would experience a dollar of principal loss. The lines are curved because in a CLO, not only do you have the hard subordination that par value subordination we talked about, but you also have the benefit of cash flow subordination in the event of severe underperformance.
What that means is that at the more junior levels of the capital structure to the degree there's underperformance, interest and dividends can be diverted to deleverage the structure. So in essence, think of it as equity in lower-rated tranches transferring value to the higher-rated tranches by diverting their cash flows. You can see in all instances, there's considerable cushion against defaults under various recovery scenarios. If you look at the one diamond that's posted that says post-GFC, that represents what was experienced in the four years of 2009, 2010, 2011, and 2012. And just for reference, in 2009, the loan market default rate reached 9.6%. So again, a relatively high-stress scenario, which didn't come close to impairing any of the CLO debt tranches. I think that concludes my prepared remarks. I appreciate your time and attention today.
Hopefully, you have a better understanding of the CLO asset class, why it's attractive to F&G, and why they have chosen us to help them manage this part of their portfolio. I'm going to turn it back to Chris at this point.
Great, Dan. So a couple of quick questions that came in here. The first is from Mike Ward at UBS. He said, "Could you discuss your outlook for CLOs? Some have been placed on negative credit watch, recognizing that even if they were to get downgraded, it wouldn't pose a material threat to capital for F&G. That said, leveraged loans are faring worse than they did in the financial crisis, and it's even impacting some higher-rated tranches.
Sure. Absolutely. I think to your point, the rating agencies have been quite active, both at downgrading the actual underlying corporates but also in their activity around the CLOs themselves, CLO tranches themselves. I think part and parcel, it's a reaction to what happened during the financial crisis where they were criticized heavily for being slow on the uptake. I think they're trying to make sure that that's not what happens this time. So as a result, they've been very proactive. If you look at really what's happened to date, and I'm just going to pull up some stats here. If you bear with me one second, I can give you some details. Sorry about that. I had it open and it closed on me. Okay.
So, if you think about one-third of all triple B CLO tranches for broadly syndicated CLOs have been placed on negative watch by one of the rating agencies, half or 52% of all double B tranches have been placed on negative watch. But so far, really, and watch is just that they're looking at them, there've only been 15 double B tranches that have been downgraded. All of these have been downgraded by Moody's. And in the last week, we've seen the triple B tranches that they've had any action on, actually, the ratings have been affirmed. So it seems like they're really focused on the bottom of the capital stack. And I think there's no doubt that the underlying downgrades of the actual loans have driven them to actually take a look at this given they're directly related.
So I think they've been pretty aggressive in how quickly they've anticipated what may or may happen in terms of corporate performance in the second quarter and beyond after COVID. But our expectation is that triple B and up will remain quite resilient, and that really where you'll see most of the downgrade action is going to be at the double B and below level.
Got it. Thanks. Thanks, Dan. So one more. Joel Hurwitz from Dowling asked, "In terms of CLO, can you provide some high-level color on how the underlying loans have performed in the various structures in which F&G holds securities? Are we starting to see coverage tests breached in any of these structures?
Sure. So as we sit here today, I would say approximately a quarter of all the CLOs that F&G owns are currently failing the interest diversion test, which is the lowest test in the capital structure. It really sits between the equity and the debt. And so as a result of that, the equity is diverting cash flow currently to buy additional collateral. So again, that's transferring value from the equity to the debt holders. And that's largely being driven by the triple C, not in actual credit losses in these portfolios, but just by the rating agency activity we talked about. Our 25% of the portfolio compares to slightly over 30% for the overall market in terms of this interest diversion trigger.
But I think we feel, to a large degree, because it's being driven by ratings downgrades versus actual losses, it's happening at a time where all these companies are current on their debt. CLO cash flows are still very strong. And so the amount of that diversion that would otherwise be going to the equity is actually considerable and is really a benefit to fortifying investment-grade tranches going forward. And then I would just note there's only three tranches that we have exposure to where they're failing the next level up, which is an over-collateralization test at the double B level, where interest then the double B is paying its interest, and that interest is also being diverted to the benefit of the higher-rated tranches.
Got it. Thanks, Dan. All right. Now, I think we're going to turn to the CMBS portfolio. I'm going to turn it over to Jonathan Pollock, who's the global head of Blackstone's Real Estate Debt Strategies Group, or BREDS for short, and a member of the Real Estate Executive Committee. Jonathan?
Thank you, Chris. And good afternoon, everybody. Over the next few minutes, I'm going to give you some background on Blackstone Real Estate and BREDS and how our unique advantages work to the benefit of our investors. Mike Wiebolt, who runs our securities investing business and is the portfolio manager of the F&G portfolio, will talk about the thoughtful approach to asset selection in creating the F&G portfolio, which has been informed by these advantages. Over the past 29 years, Blackstone has built one of the largest real estate private equity businesses globally with $161 billion of investor capital under management. This scale makes us one of the largest buyers, sellers, and financiers of real estate in the world. We seek to generate attractive risk-adjusted returns for our investors across cycles and over the long term with a focus on preservation of capital.
As you can see from our 29-year track record on the right side of the page, we have been able to accomplish exactly that. We have generated 15% net returns for our opportunistic equity investors since our business was founded in 1991, 9% net returns for our BREDS investors since that business was founded in 2009, and 8% net returns in our core plus real estate business since 2013. We operate around the globe with large-scale teams in the U.S., Europe, and Asia, each headed by long-standing partners of the real estate business. This connectivity is a distinct advantage with information about investment opportunities as well as asset performance communicated in real time to the global team. The size of our team in real estate and in BREDS specifically allows us to dedicate the right resources to investing and asset management.
Our seamless communication allows these teams to benefit from our deep knowledge and latest views on fundamentals and risk. Our portfolio is the unique information edge that feeds this connectivity. It comprises almost $300 billion of owned real estate and nearly $100 billion of financed real estate. Our dedicated asset management team gathers real-time information from these portfolios, which cover all asset classes and most major markets. And we use this info to drive every investment decision, buy or sell, that we make as a business. We spot trends in advance of the broader market, and we act with conviction. You can see this in industrial real estate, where we have been one of the largest buyers of warehouses around the world for the past decade, and in malls, where we haven't bought or financed a mall property in the U.S. in nearly 10 years.
We don't just rely on our own information. For a lot of what we do, and especially for investing in CMBS, it is important to have real-time data feeds from the leading providers in the market. This allows us to stay ahead of leasing and transactional trends throughout the CMBS loan universe, informing our buy and sell decisions. We have used this information and the technology that helps us digest it, which is proprietary, to underwrite more than three-quarters of the underlying loans in the entire CMBS universe. We believe there's not a bond that comes to market that we are unprepared to evaluate, which is important in selecting for quality and relative value. We also use this information to asset manage what we have.
This doesn't just mean understanding what is happening with the underlying credit, but also making decisions to prune the portfolio when it is prudent to do so. Over the past two and a half years, we have built a diversified defensive CMBS portfolio for F&G. Mike will talk about this when he takes over in a minute. but the keys to that defensive positioning include 84% of the portfolio is investment-grade with a weighted average NAIC rating of 1.2. We have bought predominantly seasoned transactions, which have the advantages of visibility into credit performance and contractual amortization of the underlying loans, reducing risk exposure over time prior to our acquisition. and we have selected towards the more stable property types like multifamily and away from more challenged property types like retail, which exhibit more volatility.
I'll now hand the presentation over to Mike Wiebolt, who can talk in more detail about the construction of the portfolio.
Thanks, Jonathan, and good afternoon, everyone. As the manager overseeing the F&G CMBS portfolio, I want to spend the next few minutes walking you through the ways in which our team has worked together, leveraging the strengths of the broader Blackstone real estate platform to craft a differentiated defensive portfolio for the company. I want to start by noting that CMBS comes in three different types, and we have used all three to diversify the portfolio and to create the concentrations in more stable property types that Jonathan mentioned. The largest segment of the CMBS universe and of F&G's portfolio is commonly known as conduit CMBS and comprises multi-borrower, multi-asset securitizations. These securitizations are long-term, fixed rate, and offer diversified exposure across real estate asset classes and geographies. The other two major components of the CMBS market are multifamily or agency CMBS and single-asset, single-borrower CMBS.
We'll discuss these sectors in more detail in coming slides. But by leveraging our expertise and market access across this universe, we've constructed a diversified, high-quality portfolio characterized by modest underlying loan leverage of 55%. Only 16% of the portfolio is non-investment-grade securities, and these are predominantly single-asset, single-borrower exposures backed by institutional quality office properties with low loan-to-values. By diversifying across CMBS sectors, we have crafted a portfolio that is distinguished from the CMBS conduit market in terms of property-type exposure. This positioning reflects views informed by our experience as real estate investors across the capital structure. This experience has encouraged us to be significantly underweight the retail sector, enclosed malls in particular, as these property types face continued headwinds from the growth of e-commerce and changing consumer preferences. Conversely, we have recognized the positive supply-demand dynamics benefiting U.S. housing and developed an overweight position in that sector.
Developing a portfolio with these characteristics would not be possible without loan-level underwriting capabilities, insights from our entire real estate platform, and broad access to the market, which we believe will be a differentiating factor over time. I'm going to spend the next few minutes walking through our various CMBS exposures in more detail while illustrating the asset selection process that differentiates this portfolio further. We're starting here with Conduit CMBS, which is the largest segment of the portfolio. While this segment of the portfolio represents diversified exposures to property types and markets, we have shaped the portfolio by focusing on more seasoned securities. On average, the securities in the portfolio were issued in 2016, which offers several key benefits relative to purchasing recent vintage, new-issue CMBS. First, seasoning has allowed the underlying loans to benefit from strong appreciation in commercial real estate prices since issuance.
The 55% loan-to-value attachment point at issuance, conservatively began with, has been reduced further by this dynamic. Second, by purchasing securities and transactions that have been outstanding for several years, we have the benefit of incorporating updated property-level performance into our underwriting assumptions. Finally, seasoned securities benefit from enhanced credit subordination relative to more recently issued CMBS, meaning the bond structures themselves have more protection from losses. In addition to the benefits achieved through security selection in F&G CMBS portfolio, it's also important to highlight the significantly enhanced protections offered to CMBS investors since the financial crisis. These protections relate to both collateral and structure. As a starting point, the post-crisis loan-to-value ratios of CMBS securitizations have been, on average, 730 basis points lower than securitizations pre-financial crisis.
This additional equity cushion is further augmented by more conservative rating agency treatment, which results in 370 basis points of incremental protection from collateral losses and 370 basis points of additional thickness at the security level, reducing structural leverage. Putting this together, you can see that F&G's conduit CMBS portfolio benefits not only from the protections afforded by post-financial crisis CMBS, but also by security selection designed to focus on increased transparency and credit support along with lower leverage. Single-asset, single-borrower CMBS represents the second-largest exposure in the F&G CMBS portfolio. These securities exist to finance loans too large to be included in multi-borrower CMBS transactions. As a result, and in contrast to the diversified exposure offered by conduit CMBS, this sector allows us to select individual assets.
Blackstone is uniquely positioned for this task, given the fact that assets large enough to be securitized in this market are typically high quality and institutional in nature. They're often located in markets and backed by sponsors our team knows well. These dynamics, coupled with a modest 51% loan-to-value on the underlying securities, make the asset class a compelling avenue for diversification in F&G's portfolio. Multifamily CMBS is the third-largest exposure in the F&G CMBS portfolio. This segment consists exclusively of securities issued as part of the Freddie Mac Multifamily Loan Securitization Program. Freddie Mac uses securitization to fund nearly all of its multifamily loan originations. This portfolio benefits from credit subordination, conservative leverage, and exclusive exposure to loans underwritten to agency standards in a high-conviction asset class. To bring this all together, I want to emphasize that F&G CMBS portfolio is differentiated in several key ways.
First, sector diversification within CMBS allows us to construct a portfolio that reflects our proprietary commercial real estate perspective. Second, security selection within sectors allows us to invest around themes like seasoned conduit and office single-asset, single-borrower securities. Third, these efforts are further underscored by the type of loan-level underwriting and market access that can only be delivered by a fully integrated real estate business. And last, and maybe most importantly, the insights we gain from this platform and the exceptional standard of care we bring to all of our investments will continue to be reflected in the management of F&G's portfolio. Now I'll turn it back to Chris for questions.
Great. Thanks, Mike. Yes, we do have a couple of questions here. So let's see. Actually, Joel Hurwitz at Dowling and Mike Ward at UBS, kind of different flavors of the same question. But in general, for CMBS, can you just provide a little color how you think about the current environment, how that's going to impact commercial real estate, but specifically the impact on retail, hospitality, and office?
Sure. Great question. Thanks, Chris. Across real estate, as the question implies, we expect to see a wide dispersion of outcomes varying by sector. Hospitality and retail are hardest hit, as has been noted in the press repeatedly over the past few months, given closures. Interestingly and encouragingly, we're seeing, as the economy opens up and as hotels are allowed to reopen, some early strength in occupancy that I think is beyond what expectations might have been. And so we're quite optimistic about that, obviously subject to what happens with the progression of the virus. In particular, we're seeing that strength in drive-to holiday locations in the U.S. For retail, COVID-19 has really accelerated trends that were already underway in the sector due to the rise of e-commerce.
I alluded to this earlier when I talked about our decision to buy a significant amount of warehouses and not to buy malls, and I don't need to tell this group of people, there have been a number of retail bankruptcies in recent months. As far as it relates to office space, I think it's a little bit too early to declare significant changes to office use. I would say, just to give you some flavor of our own personal experience with this, I think we've done quite well with the work-from-home experience, especially in the first couple of months, but over time, you see the challenges, in particular, generating and maintaining a culture, also onboarding, hiring people, are all very difficult things in a work-from-home environment, so our belief is that office space will still remain very important to corporations.
This one might be a combination for Jonathan and probably Mike Nolan as well. Mark Hughes at SunTrust asked, "What do you think will happen to commercial office pricing? And for the title business, what will commercial purchase/refi volume look like this year?
I guess I'll take the first part of that.
Yeah. I think.
Thanks. Yeah. Hey, sorry. I think, as I was saying, as it relates to all these asset classes, it's a little too early to call the direction on valuations, the impact on specific cities versus others. But I do think you'll see continued demand for office space, and you may see some changes in geographies over time. But it's a little early to call. You have a lot of competing factors out there, including a very low and supportive interest rate environment.
Yeah. It's Mike. I'll just add on. I would agree. It's definitely early to call. We have seen some improvement in our order volumes as we've gone through May and now into June sequentially in the commercial orders. Still pretty modest, but it's heading the right direction. And I think we really need to get into the third quarter to see what kind of bounce back we're going to have. But given the fact that we've had five record years in a row and our best year in 2019, it's hard to envision right now that we'd be at those levels. But it really just depends what happens in the second half.
Great. Thanks, Mike. So now I'm going to turn it over to Rob Camacho. Rob's a senior managing director and co-head of Blackstone's structured products group within GSO.
He's going to spend the next few minutes discussing the Blackstone Insurance Specialty Finance business. Rob?
Thanks, Chris. Blackstone Insurance Specialty Finance, or BISF, is an asset-backed business unit within GSO, Blackstone's credit platform Dan spoke about earlier. Our business leverages the experience of credit investors across all parts of the broad credit market: public and private, investment-grade, and non-investment-grade. We are focused on generating excess returns by capturing a complexity and illiquidity premium while taking less risk than similarly rated unsecured corporate credit. I'd like to unpack what we mean by asset-backed. What we're specifically talking about is an asset that is backed by a diverse pool of either physical or financial assets that can be liquidated to recover our investment. Earlier, Gio highlighted Blackstone's ability to originate credit assets. The power of the Blackstone platform is manifest in our proprietary deal flow. Given the breadth of the firm, we receive referrals from all Blackstone business units as they traffic in the private markets.
Combining our best-in-class sourcing with the ability to attract the best structuring talent has helped us screen 221 deals over the past 18 months, representing over $9.5 billion of investment. F&G's stable liability profile is an ideal source of funding for the type of credit we are originating. And combining that with Blackstone's market footprint and structuring capabilities, we can work with borrowers to come up with financing solutions that others simply cannot compete with. We are constantly evaluating the structured investment landscape by reviewing relative value, supply-demand dynamics, and other broad factors when considering lending opportunities. Our approach leads to high-quality investments in areas with scale and assets that are generating cash. These include corporate receivables, rail, renewables. This is an area of increasing importance and a place we'll dive into shortly: auto and consumer.
When we originate an opportunity, we underwrite at the most granular level to really understand the fundamentals of each asset. This is a common theme across our platform: fundamental bottom-up analysis done on an asset-by-asset basis. Over the last 18 months, we've executed 17 private deals with an average spread over the comparable corporate index of between 100 and 400 basis points without taking additional credit risk. Earlier, I mentioned that our team reviewed 221 unique deals during the same time period. Quick math shows us that our hit rate is just 7.7%, which emphasizes the selectivity of our investment process. It's also worth noting that along with its incremental spread of 100 to 400 basis points, BISF seeks favorable default recovery characteristics due to the team's structuring and credit underwriting experience.
The dots are actual deals originated by the team, all of them AA to BBB, sitting above not only the comparably rated corporate index, but all above the corporate BBB index. The two diamond-shaped deals on the graph represent a transaction with Altus Power, which we'll dive into shortly. To break this down a bit further, I thought it might be helpful to provide the excess spread of our deals by rating over the comparable corporate index. For AAs, 191 basis points; for singles, 216 basis points; and for BBBs, 210 basis points of excess spread. The portfolio highlights of our originated deals are seen on the next slide. The stats are as follows: $1.2 billion in total scale, 97% being investment grade, with an average excess spread over an equivalently rated corporate benchmark of approximately 200 basis points, with an average NAIC rating of 1.4.
Now, to review our investment in Altus Power. This investment is a great example of excess return through complexity and not through excess risk-taking. Altus is a solar power provider with over 130 distributed generation facilities across 15 states and dozens of investment-grade off-takers. We then took these investment-grade corporate promises to pay and packaged them into a $250 million investment-grade securitization with an average coupon of swaps plus 250. Again, a significant pickup versus the public comparable deals. Thanks for taking the time to learn a bit more about BISF. Chris, I'll hand it back to you.
Great. Thanks, Rob. So a few more questions that have come in here. The first one goes back to CLOs, and this is from Morgan Lunt at Windacre. "How long does it take to know if there's a real default issue in CLOs? If the economy troughed in April or May, how long will it take to have a good sense of any performance issues?
It's a good question. I think the second quarter will give us a very good indication, I think, of how much damage was done, and then I think, to answer your question, it's going to be very much dependent upon the magnitude and shape of the recovery, and that obviously evolves. I think initially, most companies that went into this environment with issues, I think, are going to be early defaulters, so I think those will, and we're already seeing that happen, so companies that were already a little bit on the ropes have collapsed, and then it's really for those that weren't, that were performing well and were healthy companies prior to this, I think it's going to be very dependent on magnitude and duration in terms of how long it takes us to get back to, say, pre-virus levels.
So with that said, I think we'll have a better idea of what that looks like later in the year in terms of otherwise healthy companies now becoming impaired.
Great. Thanks, Dan. And this next one, Raj, is to you. Joel Horowitz at Dowling asked, "Could you provide some color on F&G's alternative portfolio, including a breakout of the exposure there and risks given the current environment?
Sure, Chris. So the alternative portfolio, again, approximately 4% of the portfolio as we stand today, trying to build it to about 5%. The portfolio is broadly diversified by underlying collateral. And sort of think about it as third to third to third: private equity, private credit, what we consider sort of real assets, sort of real estate. So we like the diversification by the collateral. We don't really expect that to change materially as we build into the full deployment. And as I mentioned earlier, we're about half drawn right now, Chris. So as you think about the market opportunity that's out there, it's a good spot to be in with what I consider a pretty well-seasoned portfolio by vintage and by collateral, but which has a fair amount of dry powder as we see valuations obviously begin to look quite attractive in some of the private asset classes.
Great. Thanks, Raj. And then another one, Chris Gavotoni from Wolfe Research asked, "If you're wrong and the portfolio performs worse than indicated in this presentation, which portfolio is most likely to see issues: CLOs, CMBS, or corporates?" This is sort of which of your children do you like the least, I guess, question.
Sure. Look, I mean, we like the portfolio that we have right now. We think the stress test supports the data, rather, the stress test data supports the positioning that we have established with our rotation out of corporates into these asset classes. Where we sit today, obviously, we're paying a lot of attention, kind of echoing what Jonathan Pollock and Mike Wiebolt have said around real estate. There is a wide dispersion of outcomes as we sort of think about hospitality and retail, the early data coming out of hotels, obviously, beyond expectations, strength prospectively, and sort of drive-through locations looking at that closely. I would say that as we think about the asset classes, we like what they are, but we do know that there could be a wider dispersion of returns in the real estate portfolio.
Great. Thanks. So one more, Snehal Amin writes, "Why not massively increase exposure to private structured if the risk-adjusted returns are so high? Might be a good opportunity to talk about ALM and duration matching, etc.
Yeah. Sure, Chris. And so look, I mean, at the end of the day, we're trying to create an asset portfolio that allows us to maintain, hopefully, expand our net spread against the liabilities of the company, right? It's an asset portfolio designed to support the writing of insurance products. So there's a consideration here about the ALM match, Chris, that you mentioned. Private structured credit tends to be shorter dated. The liability duration of F&G's portfolio is wrapped around the 67 range, so there's only so much of that that you can buy and still be well-matched against that liability profile. And second, as Rob Camacho mentioned in his remarks, this is a conscious underwriting of illiquidity and complexity while picking up excess spread. At the end of the day, you have to sort of think about the overall liquidity of your entire portfolio.
We have a good beat on that as we think about the liability spread writing and what the prospective lapse rates look like. There's only so much of it that you can buy when you think about its role in supporting an FIA or MYGA product portfolio.
Great. Thanks, Raj. So at this point, I think I'd like to wrap up, and I just want to try to summarize some of the takeaways from today's presentation. "We feel comfortable and confident in the credit soundness of our investment portfolio like Blackstone. We're focused on downside protection and playing defense rather than offense. We believe Blackstone's ability to source proprietary investment-grade private debt is a key competitive advantage for us. The partnership with Blackstone allows us to leverage the breadth and depth of the entire Blackstone ecosystem, and Blackstone Insurance Solutions is tailored to managing those capabilities to support the specific needs of F&G as an insurance company. And most importantly, the F&G team maintains control over strategic asset allocation, which is driven by our stable liability profile." So I just want to thank everyone for their time this afternoon.
We appreciate your interest in F&F and F&G and for joining today's presentation. And with that, this concludes the webcast. Thank you.