Pioneer lifts ILS Interval Fund 28% to $142m

by Artemis on September 29, 2016

In the last reported quarter U.S. mutual fund manager Pioneer Investments has grown its interval style insurance-linked securities and reinsurance linked investment fund, the Pioneer ILS Interval Fund, by another 28% to reach almost $142m of ILS assets under management.

Pioneer Investments continues its strategy of steady growth for its ILS Interval Fund, adding new investor inflows as and when market opportunities to deploy capacity, at rates that meet its risk and return targets, allow.

Pioneer Investments, one of the leading U.S. mutual fund and global asset managers, has around $245 billion of assets under management globally and $66 billion in the U.S. The firm, which had been investing in ILS and reinsurance linked investments for some time in its multi-strategy funds, launched the Interval ILS fund in late 2014 as a dedicated insurance-linked investment strategy for its clients.

In terms of how the strategy has grown, Pioneer reported $54.66m of insurance-linked assets managed in the ILS Interval fund by May 2015, growing its assets by 18% to $64.4m by the end of July 2015, then up another 17% to $75.4m, a further 27% to almost $96 million at the 31st January 2016 and then by 16% to $111 million at the 30th April 2016.

Now, at the 31st July 2016, Pioneer reports that the ILS Interval Fund portfolio of insurance and reinsurance linked assets has grown to almost $142m, an increase of 28% in the last quarter.

Just over $28m of the portfolio is invested in catastrophe bonds, with the remainder being a range of collateralised reinsurance sidecar notes, private quota share transactions and other structured reinsurance or ILS type deals.

Interestingly, the portfolio disclosure tells a story of valuation declines on many large positions in the fund, with certain reinsurance sidecars and quota share transactions valued much lower than their original principal.

Update: Pioneer told Artemis that the decline in value of certain positions is not due to losses, but rather is related to principal return and partial commutation of these contracts. The Pioneer ILS Interval Fund has returned 5.32% year-to-date.

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