As David Hunt prepares to hand over the reins of the $1.4 trillion asset manager to Jacques Chappuis, co-head of Morgan Stanley Investment Management, PGIM is doubling down on its expansion plans in private credit, real assets, and international markets. The Prudential Financial subsidiary has identified three key areas of growth: expanding private credit through acquisitions in Europe or Asia, building out real assets with a focus on infrastructure equity, and increasing scale internationally, particularly in Europe and Asia.
"We’re looking to buy new capabilities rather than pursue consolidation," Hunt told Institutional Investor, as he gets ready to take the role of chairman in May, when Chappuis becomes president and CEO. Hunt will remain chairman through July.
During his 13-year tenure as PGIM’s president and CEO, Hunt has already laid significant groundwork for the expansion, growing the firm’s private alternatives business to nearly $321 billion. Yet he believes the firm "can be much bigger," particularly in private credit, which he sees as "the perfect asset to sit behind the liabilities of an insurance company." (The firm currently focuses primarily on real estate and private credit, with limited involvement in private equity beyond secondaries.)
Hunt highlighted a fundamental shift in global financing dynamics that’s creating opportunities for asset managers. Since the global financial crisis, banks have retreated from middle-market lending and asset-backed financing. "Traditionally, banks played a big role in this, but they don’t have the capital to do it like they used to," Hunt said. "Financing is coming privately now, not from the banks. This is where we’re headed."
The firm’s growth strategy has been complemented by strategic acquisitions, including Swiss private equity secondaries firm Montana Capital Partners, U.S.-based lower- and middle-market direct lending business Deerpath Capital, and direct indexing player Custom Harvest.
A big focus under Hunt has been building out PGIM’s insurance asset management business. Prudential’s deal with Warburg Pincus to launch the Prismic reinsurance platform in Bermuda, which reinsures $10 billion in structured settlement annuities from Prudential, exemplifies this strategy. The platform allows PGIM to grow Prudential’s insurance business while generating additional fees. Assets are managed jointly by PGIM and Warburg Pincus.
The firm has also significantly expanded its international footprint. Assets in Japan have quadrupled since 2011, now approaching $200 billion, while the London office has grown to over 500 employees. "When I started, we didn’t have a big presence in London," Hunt noted.
Despite industry trends toward passive strategies, PGIM remains committed to active management. "We believe in active management, and we don’t offer passive strategies," Hunt said. "While passive has grown hugely, it’s one of the most price-competitive parts of the market. We generate really good alpha and believe in staying in the active-only space."
Looking ahead, Hunt emphasized that Chappuis’ background aligns closely with PGIM’s growth plans. "If you look at Jacques’ background and then at our strategic direction, there’s a nice parallel," he said. "He has a background in solutions, real assets, and distribution, and all of that is going to be critical for the next wave of growth. His experience matches well with our future ambitions."
"I feel good about where we’ve gotten," Hunt reflected. "The business is in really good shape, and it’s been nice to see momentum this year. We’ve found a really good leader in Jacques, who has a lot of experience in distribution and solutions. Some of our big priorities are set, and I’m extremely pleased with where we are."
Hunt added, "We’ve had a very good year of momentum, and our strategic plan is starting to deliver. I think the time is right for a fresh pair of eyes."
