Credit Suisse and ILSIM raising capital for second ILS P&C run-off fund

by Artemis on October 25, 2017

The Credit Suisse Asset Management (CSAM) insurance-linked strategies team and sub-advisor ILS Investment Management (ILSIM) are in the process of raising a second ILS fund focused on property and casualty run-off opportunities, with filings showing around $282.5 million successfully raised of a targeted maximum of $800 million.

The two firms, the Credit Suisse ILS unit which has almost $9 billion of ILS and reinsurance linked assets under management, and ILS Investment Management, which is an insurance-linked investment focused asset manager owned by the Bermudian legacy and run-off specialist Armour Group, launched their first legacy P&C focused ILS fund in Autumn 2014 with $576m of committed capital to invest in run-off business.

That strategy has seemingly been a success and now the pair are raising funds for a second ILS fund focused on opportunities in the P&C run-off market.

It could be an opportune time, given the run-off market has seen a rise in activity and following recent catastrophes and industry losses it is expected that legacy P&C insurance and reinsurance business may become increasingly available to acquire.

According to SEC filings two fund structures will support the second capital raise, with ILS Property & Casualty Feeder Fund II, L.P. and ILS Property & Casualty Fund II, L.P. vehicles both filing Form D notices with the SEC.

The filing for the ILS Property & Casualty Feeder Fund II, L.P. shows that $268 million has been raised through this fund structure, while the filing for the ILS Property & Casualty Fund II, L.P. shows another $14.5 million raised, so a possible total of $282.5 million.

Both filings show a maximum offering amount of $800 million, so there’s a good chance that there will be more to come, or assets raised elsewhere, for the second edition of the ILS P&C run-off fund strategy.

The ILS P&C Fund strategy from Credit Suisse and ILSIM offers something unique to ILS investors, a differentiated strategy based on run-off portfolios and with Armour Holdings onboard, managed by one of the top firms in the legacy market.

Having the expertise in acquiring and managing run-off business is key for a strategy like this ILS fund, as it is an entirely different proposition to managing a portfolio of one year reinsurance contracts, as is more typical in the ILS market.

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