US regulators are warning about "circular ownership" and opaque holdings in multi-asset securitisations used by private capital groups including Apollo and KKR. The National Association of Insurance Commissioners (NAIC) flagged concerns that these investments filling insurance balance sheets could harbour greater risks than perceived.

These structures slice stakes in funds holding credit card debt, mortgages, private equity stakes, and direct loans. Life insurers like Athene and Global Atlantic have invested in products such as Apollo Multi-Asset Prime Securities (AMAPS), Thunderbird, and Lightning to boost annuity returns. Regulators worry about interconnectedness between insurer portfolios and circular ownership where structures invest in each other.

The NAIC working group plans to request greater disclosure of underlying assets and investigate circular ownership risks. Regulators also identified maturity mismatches where products promise decades-long returns but rely on assets maturing much sooner, questioning long-term profitability.

Apollo defended AMAPS as having diverse, highly-rated collateral with less leverage, while KKR declined comment. The NAIC documents signal potential stepped-up disclosure or capital requirements that could blunt growth of this fast-growing corner of financial markets.