MLC Investment Management, a wealth and asset management unit of the National Australia Bank Group, has given a mandate to AlphaCat Managers Ltd. to manage insurance and reinsurance linked ILS investments for it.
AlphaCat Managers Ltd., the ILS and third-party capital focused unit of Bermuda headquartered insurance and reinsurance group Validus, will be responsible for investing and managing 2% of MLC’s MySuper portfolio and 2% of the MLC Inflation Plus Moderate and Assertive portfolios, according to this article by Wouter Klijn of theinstoreport.
In total MLC has $136.7 billion of assets under management. The MLC MySuper product is said to have around $2.6 billion of assets, which could make the AlphaCat allocation $50m for that fund alone. However that could increase, as MLC will be transferring new members into the MySuper product by late 2016, which could increase the overall size of the ILS mandate for its retirement product. The ILS allocations in the two MLC Inflation Plus funds are smaller we understand.
MLC had previously run an ILS and reinsurance linked investment allocation through dedicated catastrophe risk investment manager Nephila Capital, but has now switched the mandate to AlphaCat saying that it wanted to work with a manager backed by a global reinsurance player like Validus.
Nephila ran a catastrophe bond mandate for MLC from 2010, but the asset manager is now looking to get deeper into the reinsurance market with the help of AlphaCat, perhaps signaling a desire to move beyond pure catastrophe lines as well, something Validus’ reach can certainly assist with.
MLC explained; “MLC has appointed AlphaCat to manage insurance-related investments due to their investment experience and expertise in the management of natural catastrophe and weather-related reinsurance risk exposures.
“AlphaCat enables us to access the risk exposures that we find attractive, more directly and cost effectively than via a pure specialist manager. This is because AlphaCat benefits from the sourcing and underwriting expertise of its parent company, the Validus Group (Validus), a specialist global reinsurance business.
“Through AlphaCat we are able to tailor a portfolio of insurance risks more directly, which may enhance the prospective net of fee returns to our investors.”
AlphaCat Managers had around $2.08 billion of ILS assets under management as of the end of June 2015.