LGT wins £280m mandate for UK council pension fund, to include insurance-linked securities (ILS)

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Alternative investment manager LGT Capital Partners, has won a £280m mandate to manage a portfolio of alternative investments for UK local authority Hertfordshire County Council. It is one of the largest mandates focusing solely on alternative asset classes from a UK authority pension fund underscoring the attractiveness of alternatives at the moment. The mandate covers hedge funds, commodities, insurance-linked securities, property, private equity and other alternative asset classes.

LGT Capital Partners is the alternatives focused arm of LGT Group, who last year took over the Clariden Leu ILS investment management operations, turning it into their own LGT Insurance-Linked Strategies arm. So LGT Capital Partners will likely offload the management of the ILS component of the alternatives portfolio to their own LGT ILS team, which is likely an added attraction for major pension funds looking for a holistic alternatives strategy.

Roberto Paganoni, CEO of LGT Capital Partners, commented; “We are delighted to be able to work with Hertfordshire County Council on this mandate, which will provide their pension fund with an actively managed portfolio of nine alternative asset classes, access to best-in-class external managers and the convenience of a single reporting solution for their alternative investments.”

LGT Group have an interesting offering in the alternatives market now as they have many specialist managers in-house working on niche asset classes which are currently very attractive to large pension funds. Insurance-linked securities, catastrophe bonds and reinsurance-linked investments currently offer a great diversifying opportunity for pension funds and this is not the first UK local authority scheme we’ve heard of allocating capital to the ILS asset class.

Here are some older articles about large pension funds allocating capital into ILS and reinsurance-linked investments:

Illinois Teachers’ pension fund puts $40m into reinsurance with AQR

Ohio Schools pension fund commits $30m to reinsurance & ILS through Nephila

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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