Boehly had good news for lenders backing his life insurance company: He was about to come into a bundle of cash.

On a little-noticed conference call in August, shortly after a credit rater voiced concern that Boehly’s Security Benefit Life Insurance Co. had made an unusually large number of loans to affiliated businesses, he sought to assuage any worries.

“I’ll be coming into significant liquidity, personally, as a result of exiting certain investments,” he said. “Those will generate billions of dollars of liquidity.”There was a time when policyholders, annuity buyers and bond investors barely bothered to consider the personal financial health of financiers running life insurers. But that’s gone this year with the revelation that Boehly’s longtime business associate, billionaire sports mogul Mark Walter, plowed about two-fifths of his main insurance companies’ portfolios into affiliated businesses.

Among major life insurers with more than $50 billion of assets, there’s only one with a similarly large share of affiliated investments: Boehly’s.

The two billionaires helped pioneer what has become one of Wall Street’s most lucrative strategies: arranging for an investment firm to take over a life insurer, dial up annuity sales and plow the cash into higher-returning — and potentially riskier — assets. Along the way, the profits helped them build personal empires, including their joint ownership of Major League Baseball’s Los Angeles Dodgers and other sports teams.

In Boehly’s case, Security Benefit’s affiliated portfolio includes investments in a roughly 17-acre development in Beverly Hills that’s offering space at $7,000 a square foot, a gleaming 55-story office tower in Miami’s Brickell financial district, an art deco hotel on nearby South Beach, the South by Southwest festival in Texas and Flexjet.

Security Benefit also has provided funding for A24, the indie film studio with titles including and.

The affiliated holdings — which Boehly described in August and said are performing well — are a far cry from the plain-vanilla, investment-grade corporate bonds that used to pack life insurers’ portfolios. In fact, they put Boehly alongside Walter at the forefront of an industry debate over how such interconnections between insurers and their owners create risks.

Walter faces a federal probe that’s tracing some of the loans his insurers made to his other ventures without disclosure until this year. About 40% of his two main insurers’ combined holdings are directed to affiliated entities.

Boehly is in a much better position, thanks to Security Benefit’s long-running disclosures. The firm — once controlled by Walter and now central to Boehly’s Eldridge Industries investing conglomerate — has for years noted that it has billions of dollars of affiliated assets, amounting to 42% of its invested holdings.

Such deals are allowed as long as they’re publicly disclosed for additional scrutiny. About 7% of all US life insurers’ assets were invested in affiliated entities at the end of last year, according to a recent report by the National Association of Insurance Commissioners.

Security Benefit’s relatively large concentration of affiliated assets is part of what prompted Fitch Ratings to change its outlook for the firm’s A- rating to “negative” in August. Fitch noted at the time that some of these assets could become hard to value and come under pressure in a distressed environment and that Security Benefit had indicated it planned to shrink that portion of its portfolio to a level closer to its peers.

Boehly is also looking to reshape the insurer’s unusually heavy bets on collateral loans, an asset class that will face stiffer capital rules in coming years. The vast majority of Security Benefit’s collateral loans are affiliated assets.

His team has spoken with other Wall Street firms over the past two years to explore potential transactions, such as the possibility of raising cash to reinforce its capital position, according to people familiar with the talks, who asked not to be identified discussing confidential discussions. That includes exploratory talks in recent months.

“There’s lots of folks who have approached about being partners,” Boehly said on the August call without elaborating.

How Boehly and Walter each navigate this moment will matter beyond their own firms.

More than 130 other US life insurers were owned by private equity firms by the middle of last year, according to the NAIC. The group accounted for about a third of new annuities sales in the second quarter, according to data from Wink, a market research firm that specializes in the life insurance industry.

The probe of Walter’s companies is raising questions about the business model. But for Boehly, the concerns around Walter’s firms aren’t applicable to him.

“Our transparency and our reporting has always been very clear,” Boehly said during the August briefing. “None of the companies are under any investigation at all.”Representatives for Walter have said nobody was harmed by his dealings. And investigators haven’t accused him of any wrongdoing. Walter and Boehly have long orbited each other.

An alumnus of Credit Suisse First Boston, Boehly bonded with Walter while working at J.H. Whitney. Walter soon after financed Boehly’s buyout of the private equity firm’s credit unit and folded it into his own shop, Guggenheim Partners, where Boehly eventually became president.

In 2010, they oversaw the takeover of Topeka, Kansas-based Security Benefit, which was then reeling from a soured acquisition and needed fresh cash. When Boehly later set out to focus on Eldridge he took Security Benefit with him.

At Guggenheim, the two executives had often disagreed on investments and weren’t always allies, according to a person familiar with their work at the time. But in the years since, they pursued a variety of deals together, especially in Los Angeles, where they bought into the Dodgers, basketball’s Lakers and Sparks, as well as a stake in London-based Chelsea Football Club.

Amid the probe of his empire, Walter has sought to pull off a range of deals. Last month, he and Boehly agreed to sell their stakes in Chelsea FC, where Boehly had feuded with another owner. Walter also reached a deal to sell his piece of the Lakers in August at a $12.5 billion valuation.

Since parting ways, the two billionaires have been following a similar playbook, one popularized by Warren Buffett’s Berkshire Hathaway Inc. and Apollo Global Management Inc.: loading up their insurers with assets over which they exert at least some degree of control.

Part of that is affiliated assets, created when the billionaires’ insurers lend money to their other ventures. There are also related-party assets. At Security Benefit, such deals include financing to outside borrowers arranged by Eldridge.

Regulators, speaking broadly, say such investments have the potential to pose conflicts of interest. A Security Benefit representative said any such deals are vetted by a conflicts committee and disclosed to investors.

The firm says it also finds reinsurance at arms length, though it does own a stake in its main counterparty. Regulators have noted that such relationships — even if minimal — can compound risks if investments sour.

Out of the $12.2 billion of reserves that Security Benefit ceded to various reinsurers, about $10.4 billion was directed to SkyRidge, a firm based in Bermuda and the Cayman Islands. Security Benefit, which owns a 20% equity investment in the reinsurer, says that firm is independent and makes its own decisions.

The key for regulators is that Eldridge holds less than 10% of voting rights at SkyRidge — the threshold above which a reinsurer is typically deemed an affiliate.

And representatives for Security Benefit point out that the reinsurer is backed by outside institutions motivated to keep a keen eye on the risks it takes.

“It has substantial third-party institutional ownership led by an institution, unrelated to Eldridge, with significant experience in this space,” attorneys for Security Benefit wrote in a memo in response to questions from Bloomberg. “The institutions hold the largest block of ownership, by both economic and voting interests.”Security Benefit will have to amend part of its strategy.

New industry rules are set to take effect at the end of next year, reducing the capital benefits that insurers have enjoyed by structuring lending as collateral loans. Security Benefit has the largest concentration of them in the US insurance industry.

Such debts are typically secured by other investments, including stocks and bonds, letting insurers gain exposure to those assets while sometimes holding less regulatory capital than if they owned them directly.

At the end of 2025, Security Benefit held almost $14 billion of collateral loans to affiliated entities.

The holdings have provided Security Benefit with higher returns than the high-grade bonds traditionally favored by life insurers. In the second quarter, its investments returned more than 7%.

Still, investors, regulators and ratings firms have expressed doubts regarding the firm’s illiquid assets, Bloomberg reported in 2024. At the time, Security Benefit said its investment portfolio has delivered some of the best investment performance across the industry and has performed resiliently during past economic downturns.

Then, this year, the NAIC explored a change to capital rules for collateral loans, a move the firm said would have forced it to set aside more capital and unload assets into illiquid markets at low prices.

Boehly eventually got a reprieve when the group of regulators decided to heed calls to delay implementation. The new rules will take effect at the end 2027, instead of the end of this year.

Meanwhile, Security Benefit is actively restructuring its book of collateral loans. The firm estimates it needs to reduce the collateral loan pile by 30% to 40% to maintain its risk-based capital ratio, a key measure of financial strength, above 400%. In 2025, that metric stood at 424%.

Although it expects some of those loans to mature before then, the company has said it’s in talks with third parties and exploring a range of transactions, including using other vehicles to house the underlying assets, or refinancing them.

Dealing with collateral loans “is something that we have the plans, the experience and the resources to do,” the firm’s attorneys wrote in their memo. The effective date of the NAIC rule change “gives us plenty of time to address the collateral loan balance without the adverse effects that could result from hasty action.”Timely execution is crucial for Security Benefit. In its August note, Fitch said higher capital on collateral loans could deteriorate the insurer’s capital position and potentially prompt a downgrade. To dispel those concerns, Boehly, upon invoking his personal billions, projected calm on the ensuing conference call. Achieving this plan, he said, “is not something that keeps me up at night.”