T. Rowe Price's Wyatt Lee says private credit is becoming a big piece of annuity holdings

Wyatt Lee runs target date strategies inside T. Rowe Price's global multi-asset division, and his case for private credit arrived in allocation language rather than sales language. Private credit "is becoming a big piece of the underlying holdings in the annuity space," he said, and he treats that as probably a good thing, because the asset class has absorbed a large share of what traditional public capital markets once financed. The second half of his point was about portfolio construction: to build a broadly diversified portfolio that provides the income a retiree needs, private credit is a key part of the strategic asset allocation process.

The panel, held Monday, was assembled around the release of Goldman Sachs Asset Management's 2026 Retirement Survey & Insights Report, and the number doing the work in the coverage is a demand figure. Among the 5,106 Americans the survey polled in July 2026 — 3,612 working individuals across generations and 1,494 retirees ages 45 to 75 — 83% said they wanted some guaranteed income as part of their retirement income strategy.

The largest figure attached to the shift is not an annuity figure at all. Researchers at the Chicago Fed, cited by Axios, found that life insurers' investments in private credit reached $849 billion in 2024, more than double the 2014 level, an expansion that predates the current default readings. Life insurers are the balance sheets that sell annuities in exchange for savings from people who want a steady stream of guaranteed payments in retirement, so the direction of that allocation is the direction of the asset base standing behind the promise. The coverage does not break out how much of the $849 billion funds annuity contracts specifically.

Beside that growth sits a credit number that reads less comfortably. Fitch Ratings reported in mid-September that the trailing 12-month default rate for U.S. private credit borrowers hit a record 6.3% in August, up from 6.1% in July, and the stress has reached retail holders of semi-liquid private credit funds: Blackstone Private Credit Fund capped quarterly redemptions at 5% amid a surge in investors seeking to withdraw.

Those two figures measure different things, and the distance between them is the honest part of the story. The $849 billion is a stock — what insurers held at a moment in time. The 6.3% is a trailing default rate across U.S. private credit borrowers, a population wider than any single carrier's portfolio. Neither number shows what a particular insurer holds behind an in-force block of annuity business, and the coverage does not say which carriers have moved furthest into the asset class. What it establishes is that the allocation and the credit cycle are moving together, which is a weaker claim than saying one is driving the other.

For anyone selling a guaranteed income product, the default series is not an abstraction. A payout rate is set against what the portfolio behind it can earn, so a credit market whose trailing default measure has just printed a record is a moving input into that arithmetic, even when the measure describes borrowers in general rather than the carrier doing the promising.

Appetite is not the obstacle Goldman's own panelists named. "We do see the target date (retirement) funds who have the annuities," said Chris Ceder, a senior retirement strategist at Goldman Sachs Asset Management, before locating the difficulty in comprehension: "I think one of the challenges is actually getting people to understand the annuity selection." The stance he described is ambivalent rather than hostile — by and large, he said, people do not want to tie up money in an annuity, even though 83% of the survey's respondents told Goldman they wanted guaranteed income in their retirement strategy. Closing that gap is an education and distribution problem that sits upstream of any allocation decision.

Lee's seat is worth holding next to his argument. He co-manages target date portfolios at T. Rowe Price, which says about two-thirds of its $1.9 trillion in assets under management is tied to retirement — roughly $1.3 trillion of client money held in structures where the glide path, not a wholesaler's pitch, decides what gets owned. A target-date chief describing private credit as a key part of strategic asset allocation is therefore talking about his own portfolio construction as much as about the insurance industry's, and the two are converging on the same asset class from opposite ends of the retirement market.

What the coverage does not contain is carrier-level disclosure of who is holding the credit risk and in what size. That leaves Fitch's default series as the closest public gauge of the underlying borrowers and the Chicago Fed's $849 billion as the closest measure of the allocation, with no bridge between them in the material at hand. The next Fitch reading will say whether August was a peak or a step. The detail that would put the $849 billion in context — which insurers, against which blocks, at what duration — is not in the coverage.