Investing a $120 Billion Balance Sheet with No Outside Investors

Vlad Barbalat, CIO of Liberty Mutual Insurance, explains how managing a $120 billion permanent capital balance sheet with no outside investors enables long-term, flexible strategies. He shares his bullish view on US assets over Europe, sees AI disruption steepening corporate credit curves, and favors energy and infrastructure. The conversation also covers American exceptionalism, pragmatic optimism, and how AI reshapes valuation and volatility frameworks. - Liberty Mutual’s unique mutual structure provides permanent capital, allowing ultra-long-term investing without shareholder pressure and the ability to be a flexible, creative partner. - The firm is overwhelmingly US-focused, finding comfortable opportunities at home while avoiding Europe due to a lack of local expertise and geopolitical uncertainty. - AI introduces unprecedented uncertainty about which businesses will thrive, potentially leading to structurally lower equity multiples and higher volatility. - Long-duration corporate credit, especially for software incumbents like Salesforce, is seen as increasingly risky, implying a steepening of corporate credit curves. - Energy and infrastructure investments, structured across credit and equity, are delivering strong returns in the current macro environment. - Despite geopolitical shifts, Vlad remains a pragmatic optimist on American exceptionalism, energy abundance, and the country’s capacity for innovation. - The investment platform uses a vast toolkit—direct deals, co-investments, LP commitments, and club formats—to access desired exposures in the most efficient way.