Swiss Re Insurance-Linked Fund Management

Original Risk: A Society for Change Agents

76% of ILS assets at Nephila Capital come from pension funds


Pension funds are one of the fastest growing sources of capital in insurance-linked securities and reinsurance-linked investments, read our article on this from earlier this week. The pension funds of the world command a huge amount of assets and as they increase their appetite for alternative investments, the reinsurance and catastrophe risk investment space is benefitting.

But just how much of an impact are they making on the sector? One way to clearly demonstrate the interest that the world’s pension funds have in investing in assets linked to reinsurance and catastrophe risk is to look at how much pension funds contribute to the sectors largest investment manager.

The largest asset manager in ILS and reinsurance-linked investments is Nephila Capital. The firm currently reports its total assets under management as just over $7.89 billion. According to a recently published report on pension fund’s growing appetites for alternative assets, $6.02 billion, or just over 76% of Nephila’s assets under management are sourced from pension fund allocations.

Co-founder and Principal of Nephila Capital Frank Majors told us; “Many pension funds have spent a significant amount of time researching the asset class, and have therefore developed a good understanding of its risk profile. Our experience with pension funds has been very positive, as we have found they generally have an analytical and long term approach which fits this asset class well.”

The report, from Towers Watson, shows that by its reckoning Nephila Capital has now moved into the list of the world’s top 200 alternative investment managers, albeit only at number 199 due to its size. Nephila Capital is the only specialist reinsurance-linked investment manager in the list and the only investment manager offering its clients a way to directly access the return of the catastrophe risk market through its products.

In terms of alternative investment managers with pension fund assets under management, Nephila Capital comes  81st out of 100 managers in order of the amount of pension assets under management.

Getting into lists such as this top 200 alternative asset managers is an important step for the ILS sectors continued growth and promotion, and for Nephila Capital. It will help to further raise the profile of the ILS asset class with the world’s pension funds which can only lead to more inflows in future. As we said the other day, it’s still early days for pension funds in ILS and reinsurance-linked investing.

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