Lee Robinson turned a $20 million position into $200 million during the global financial crisis by shorting subprime mortgages before the market understood what was coming. Now the founder of London-based Altana Wealth is running a similar playbook - this time against life insurers.
Robinson is building bearish wagers on firms including Lincoln National Corp., MetLife and Berkshire Hathaway through credit default swaps, and is launching a new Altana fund to bet against what he sees as an overdue reckoning in private credit and the insurers who have become its biggest buyers.
"In August 2008, we were pulling our hair out, wondering how on earth volatility is at this low level," he told Bloomberg. "It feels a little like that now."
The argument is not that life insurers are about to fail. Robinson's case is more specific: that markets are not pricing the risk of writedowns from a corner of debt that is less transparent, less liquid and more stressed than spreads suggest.
A Moody's Ratings analysis showed that a fifth of the US life insurance sector's $4 trillion in fixed-income holdings were allocated to illiquid assets, mostly private credit, at the end of 2025 - up from 18% the year before. Barclays found private credit assets at US life insurers grew by more than 20% in 2025, with exposure exceeding 15% at some private-equity-affiliated firms including Apollo-backed Athene and KKR-backed Global Atlantic.
Moody's has flagged concentration risk, a widening credit quality gap and growing payment-in-kind exposure as dynamics requiring close monitoring, with analysts warning that "risks are emerging - particularly in middle-market direct lending - driven by weaker credit quality and rising borrower stress." Fitch reported in May that the US private credit default rate hit a record 6.0% in April, while Proskauer's Default Index recorded 2.73% in Q1 2026, up from 1.84% two quarters earlier.
Shorting private credit directly is difficult - the assets are illiquid and privately held. Insurers trade publicly and have issued bonds and preferred securities against which CDS protection can be bought. For Robinson, they are the reachable version of a trade that is otherwise hard to put on.
Hedge funds have more than doubled short positions against US life insurance stocks over the past year. Net notional bets on US insurers' CDS rose to $5.5 billion by May 22 from less than $4.9 billion at year-end, according to DTCC data. JPMorgan and Goldman Sachs are responding to client requests for protection against risks in the sector. Alberto Gallo, founder of hedge fund Andromeda Capital, which is also short insurers' bonds, said PE-owned life insurers were "very long private assets and have very limited capital surplus available."
MetLife pointed to recent comments from Chief Financial Officer John McCallion that around 95% of its private debt portfolio is investment grade, "well diversified and built to perform across market cycles," and said it held about $85 billion in private fixed income as of March 31. Lincoln National did not respond to a request for comment. Berkshire Hathaway declined to comment.
The US Treasury convened regulators earlier this year over private credit risks in insurer portfolios, with NAIC president Scott White flagging transparency as a top priority for 2026. The ECB has issued its own warning about European insurers' exposure.
Mark Lieb, chief executive of Spectrum Asset Management, which has been active in preferred securities since the 1970s, was direct: "There's going to be more pain for private and institutional investors going forward and insurance companies will probably have to partially write down their investments."
Robinson's Credit Opportunities fund is up 47.5% year to date and 416% since inception in 2020. His argument, stripped back, is that the risk is real, the pricing is wrong, and "any single blow-up" in a stressed insurer would send ripples across an industry that has moved collectively into the same corner of the same market.
