West Virginia Investment Management Board allocates to ILS with Elementum

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The West Virginia Investment Management Board, an organisation established in 1997 to manage the finances of pension and defined benefit plans for the State’s public workers such as teachers, has discovered investments in insurance-linked securities and reinsurance with an allocation made to ILS specialists Elementum Advisors.

The details are revealed in recent monthly financial statements, which we were alerted to by this article in Pensions & Investments.

The West Virgina board made its allocation to Elementum Advisors on the 25th of April when it put $40m into the Elementum NatCat Offshore Fund which invests in a portfolio of natural catastrophe-linked securities such as cat bonds, derivatives and other instruments linked to catastrophe reinsurance risks.

The latest financial statement for May shows an increase in the fair-value of the investment to $40.072m, so a small increase on the board’s investment in just one month. According to the financial statement this has been the board’s first hedge fund allocation of 2013.

The allocation of assets to ILS and reinsurance from U.S. state pension funds and financial organisations is becoming increasingly common. ILS, catastrophe risk and reinsurance are becoming an accepted alternative asset class that looks set to become a small component (the West Virgina board has $13.2 billion AuM) of many of these funds portfolios.

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