Tangency raises $50m, starts deploying quota share focused ILS strategy

by Artemis on May 16, 2018

Tangency Capital Ltd., a recently launched insurance-linked securities (ILS) investment venture that has a focus on quota shares, has raised its first $50 million from a seed investor and begun to deploy the capital following its “differentiated” quota share focused investment strategy.

Tangency Capital was launched at the end of 2017 by three experienced ILS investment and reinsurance convergence focused executives, Dominik Hagedorn who was previously at Deutsche Bank, Kai Morgenstern, formerly of RenaissanceRe and Michael Jedraszak who was most recently the Chief Investment Officer for ILS at Hiscox.

Tangency Capital has now raised its first $50 million from an anchor investor and has already begun to deploy it, participating in its first quota share in the last week, the firm told Artemis today.

Founding partner Dominik Hagedorn said that Tangency aims to participate in more quota share arrangements at the June and July 1st reinsurance renewals and hopes to find more opportunities as the year progresses.

Alongside further capital inflows that the manager hopes to receive, Tangency wants to be ready to create a much larger portfolio by the all-important January 2019 renewal season.

When Tangency launched, the firm said that it would be aiming to offer something to institutional investors that is not widely available in the ILS fund market, a quota share focused investment strategy.

Tangency will be a quota share focused investor, underwriting shares both on a collateralized basis and through a fronting agent on a rated basis.

“Quota shares offer a fantastic investment opportunity for institutional buyers,” Hagedorn explained. “You align yourself with those companies in the market that have the best underwriting, data and claims management capabilities and most importantly these reinsurers have a rated balance sheet, which many ILS funds do not.”

Tangency is already having conversations with other investors to bring more capital inflows so it can deploy to more quota shares as this year progresses.

“Conversations we’re having would suggest that further inflows of capital may be possible through 2018,” Hagedorn said.

But most importantly, Tangency Capital wants to become a long-term partner of re/insurers looking for quota share protection.

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