TPG has agreed a long-term partnership with Jackson Financial that will see the private equity firm manage at least $12bn for the US retirement annuity provider, according to sources cited by Bloomberg.

Under the agreement, TPG’s credit unit will initially invest a minimum of $12bn on behalf of Jackson, with a target to scale the mandate to as much as $20bn over time. The assets will be deployed primarily into investment-grade asset-backed credit and direct lending strategies, the firms said.

As part of the deal, TPG will make a $500m minority investment in Jackson, representing a 6.5% stake in the Lansing, Michigan-based insurer. Jackson will receive $150m in TPG shares at market value, with scope for additional consideration if the managed assets reach the $20bn target.

TPG chief executive Jon Winkelried said: “This strategic partnership is an important step in the evolution of our franchise and insurance practice, creating opportunities for us to extend the duration of our capital.”

The transaction reflects a broader trend among alternative asset managers to secure long-duration capital through insurance partnerships, as traditional institutional investors face constraints on allocating additional capital to private markets.

The deal is expected to complete in the first quarter and further expands TPG’s insurance-linked asset-management platform alongside similar arrangements across the private equity industry.

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