F&G Annuities & Life: Weak Alternative Returns Limit Q2 Profits

F&G Annuities & Life remains a 'strong buy' due to its significant discount to book value despite recent underperformance and credit concerns. FG is shifting toward fee-based revenue and increasing reinsurance to improve ROE, targeting 25% fee-based earnings by 2028. The investment portfolio is 97% investment grade, with manageable private credit risk and a conservative insurance book. Potential Peak Altitude unit sales and continued buybacks could catalyze a re-rating as credit performance remains solid.

Shares of F&G Annuities & Life ( FG ) have been a poor performer over the past year, losing about 18% of their value. F&G shares have struggled over the past 18 months as its profits have been