Another U.S. public body pension fund has committed capital to the reinsurance-linked investment space in recent weeks, as interest in the reinsurance space continues to grow from large pension funds. The Ohio School Employees Retirement System, a defined benefit public pension fund that provides pensions and access to health care coverage Ohio’s school employees, has committed $30m to one of Nephila Capital’s investment funds, Triton Fund Ltd.
The Ohio SERS fund has around $9.9 billion of assets under management and had recently redeemed almost $60m of investments from two hedge funds which they felt had been underperforming, according to Pensions & Investments. Nephila’s Triton fund is one of the beneficiaries of the cash from these redemptions receiving $30m, with a multi-strategy fund from Archer Capital Management also receiving an allocation of $30m.
The Triton fund, established in 2005, is one of Nephila’s flagship reinsurance funds and contains a mix of instruments including 27% catastrophe bonds, 39% reinsurance, 2% industry-loss warranties (ILW’s), 23% County Weighted Industry Loss covers (CWIL’s) and 9% retrocession (allocation percentages as at the end of June 2012). The Triton fund is one of Nephila’s higher risk/return funds, with a target return of 10% – 15% above U.S. Treasuries and had just under $500m in assets under management at the end of June 2012, so will now be over $500m.
This is just the latest in a long line of pension funds allocating capital to the ILS and reinsurance sector via fund investments, a trend that is expected to continue to grow. Links to some of our articles detailing other pension funds allocations to the space can be found below.
– RBS Group pension fund makes first allocation of assets to reinsurance
– DaVinci Re sidecar takes investment from San Antonio state pension fund
– UK council pension fund considering alternative investments including insurance-linked securities
– Oregon Investment Council commit $100m to Nephila funds
– Pennsylvania Schools pension scheme to invest in insurance-linked securities
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