Admiral Group has announced an investment in HSBC Asset Management's UK Direct Lending Fund, joining a broader industry shift toward private credit as insurers seek stable returns and diversification from traditional fixed-income markets.
The fund focuses on mid-market companies across the UK in partnership with HSBC UK Bank. It is classified as Article 8 under the Sustainable Finance Disclosure Regulation, meaning it promotes environmental or social characteristics – a category that represents the most prevalent classification among ESG-related financial products in Europe.
Admiral Group CFO Geraint Jones said the investment demonstrates the company's commitment to sustainable operations.
"It has been great to see the on-the-ground impact of the Fund and showcase that our investments can generate attractive financial returns and positive change for society," he said.
HSBC AM's fund has deployed capital to various UK businesses, including Impact Food Group, a school meal provider, and TXO, a telecommunications hardware recycling company.
Impact Food Group, which received funding in 2025, supplies school meals while working to limit food waste and reduce its carbon footprint. TXO provides telecom asset recycling services aimed at supporting a circular economy model.
Impact Food Group CFO Frank Bandura said the funding has supported the company's growth trajectory. "The funding structure from HSBC and their investors has enabled our business to scale rapidly, furthering our impact on students," he said.
The allocation reflects growing insurer appetite for private credit. According to an Ortec Finance study, two-thirds of investment managers believe private debt will see the biggest percentage increase in allocation among asset classes.
A Goldman Sachs survey also indicated that 61% of chief financial officers and chief investment officers surveyed globally expect private credit to provide the highest total return over the next year.
Meanwhile, Deloitte's 2026 global insurance outlook revealed that insurers' managed assets expanded by 25% to US$4.5 trillion in 2024, with private placements now accounting for 21.1% of total insurance assets under management, up from 20% at the end of 2023.
Research from CWAN notes that private credit remains the dominant entry point for insurers, with European firms favouring privately placed corporate bonds over the more diversified mix of private assets seen in the US.
Article 8 funds have attracted significant investor interest. According to Morningstar, Article 8 funds drew an estimated €75 billion of net inflows in the third quarter of 2025, the highest recorded since Q4 2021.
Deepak Seeburrun, head of global insurance and partnerships at HSBC Asset Management, said the fund's partnership model provides "unique access to UK mid-market loans" by combining the investment team's capabilities with HSBC UK Bank's market position.
