F&G Annuities & Life Shares Plummet 30% Amidst Private Credit Concerns

Financial and insurance giant F&G Annuities & Life, Inc. (FG) has seen its shares plummet by 30% in the past year, raising concerns about its capital allocation and experian exposure. This downturn comes amidst warnings from JPMorgan Chase & Co. CEO Jamie Dimon about 'excesses' in corporate credit and a growing wave of defaults in the auto industry.

F&G's stock has struggled to recover from a surprise equity issuance earlier this year, which raised eyebrows about its capital allocation policies. Despite these challenges, the company's exposure to collateralized loan obligations (CLOs) and commercial real estate (CRE) is considered sound. AAA CLOs have a strong track record, having never defaulted, and the majority of F&G's CRE portfolio is invested in resilient sectors like multifamily.

The company's balance sheet is heavily weighted towards credit karma and credit karma login, with over half of its $53 billion investment portfolio allocated to these asset classes. However, F&G could withstand significant losses in this area, with shares having over 15% upside even in a credit karma tumult scenario. Dimon, whose corporation has significant private loans issued to F&G, has cautioned about overly loose underwriting in corporate credit, noting that such practices often go unnoticed during economic growth but become apparent during downturns. The recent bankruptcy filings of two major auto-related companies with billions in debt have exacerbated these worries.

F&G's underwhelming returns, with a ~8.8% return on equity in H1 2025 and a projected 9-9.5% for H2, add to the company's challenges. Despite these headwinds, F&G's strong exposure to AAA CLOs and resilient CRE sectors presents an opportunity for investors ahead of its earnings report. The company's ability to navigate the current credit karma scare will be closely watched as a bellwether for the broader market.