Pioneer grows ILS Interval mutual fund by 88% to $676m

During the last quarter of record the Pioneer ILS Interval Fund, a U.S. mutual fund insurance-linked securities and reinsurance linked investment strategy operated by asset manager Amundi Pioneer Investment Management, expanded significantly, growing assets under management for the strategy by 88% to over $676 million.

The Pioneer ILS Interval Fund, interval style ILS and reinsurance-linked investment fund, had experienced steady growth, reaching $390 million by the end of July 2017.

But then, the impacts of major catastrophe loss events, including hurricanes Harvey, Irma and Maria, as well as the Mexican earthquakes and Californian wildfires, hit the ILS funds investments and Pioneer reported that the asset base for the ILS INterval Fund had shrunk by 8% to just over $359 million at the end of October 2017.

Three months later and it’s a different story.

The ILS and mutual fund manager clearly had success in raising new capital, to take advantage of higher expected rates following the catastrophe events of 2017, reporting that its total net assets had increased by an impressive 88% by the end of January 2018, reaching $676.4 million.

The interval fund continues to invest across the range of ILS assets, from catastrophe bonds, through reinsurance sidecars, private collateralized reinsurance quota shares and other private ILS arrangements.

Notable new positions include a $12.6 million in Sompo International’s Blue Lotus Re sidecar, almost $16.5 million invested in Munich Re’s latest Eden Re II sidecar issuance, $22 million in a new Gleneagles Re private ILS deal, almost $14.7 million in a Castle Stuart Re private ILS deal, $33.7 million invested in Argo’s latest Harambee Re sidecar issuance, $17.5 million in a private Madison Re ILS deal, $45.2 million in a Merion Re 2018-2 transaction, $12.7 million in an Old Head Re 2018 deal, $12.7 million in the latest Pangaea Re sidecar from TransRe, $12 million in a Seminole Re transaction, $24 million invested in Chaucer’s Thopas Re sidecar, $17 million in Brit’s latest Versutus Re sidecar issue, and over $28 million in MS Amlin’s Virivus Re sidecar.

This is just a handful of the larger and more easily recognised transactions from the Pioneer ILS Interval Fund’s now greatly expanded reinsurance-linked investment portfolio.

During the quarter reported on the Pioneer ILS management team purchased over $381 million of new positions, with just $45 million of disposals, hence the impressive growth rate.

Depreciation continued for certain assets affected by the 2017 catastrophes, but this was recorded as just under $5 million for the period.

The Pioneer ILS Interval Fund has experienced impressive growth and it will be interesting to see whether the pace of growth can continue at the next reporting juncture, as the mid-year reinsurance renewal season approaches.

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