AlphaCat ILS assets hit $2.4bn at Validus, up 71% in one year

AlphaCat Managers Ltd., Bermuda based insurance and reinsurance group Validus’ ILS and third-party capital manager, has grown its assets under management to $2.4 billion at 1st January 2016, representing over 71% growth year-on-year and strong fund-raising towards year-end.

A year ago, at 1st January 2015, AlphaCat reported its ILS assets under management as $1.4 billion, since which time steady growth has been achieved to reach $2.4 billion today. This impressive growth has largely been into the AlphaCat ILS funds, as the access to reinsurance business the unit benefits from through working within Validus ensures it can find opportunities to deploy new capital raised.

For AlphaCat this is the first time its third-party investor assets have passed the $2 billion mark, with third party sourced assets reaching $2.1 billion. Both the $1.4 billion and $2.4 billion figures do not include the assets of PaCRe, Ltd., as the hedge fund reinsurance vehicle is now off-risk as off 1st January 2016.

Lixin Zeng, Chief Executive Officer of AlphaCat commented on the growth; “We are thrilled to reach the milestone of $2 billion of third party AUM. Through the AlphaCat/Validus platform, we have deployed all of the available capital consistent with our disciplined underwriting standards. The continued growth of AlphaCat reflects investor confidence in our franchise and reaffirms the strategic value of AlphaCat to the Validus Group.”

It looks like AlphaCat has achieved significant growth in the final few months of 2015 and in the run-up to the January 2016 reinsurance renewals.

At 1st October 2015 it was reported in Validus’ results that the ILS and sidecar assets under management at AlphaCat had reached $1.752 billion of third-party and related assets, across its reinsurance sidecar, ILS fund, Direct and BetaCat initiatives.

So that would suggest growth in assets under management of $648.5 million across the ILS initiatives by 1st January 2016. If correct that is extremely impressive.

Third-party assets under management at AlphaCat, again excluding PaCRe for comparison purposes, were $1.439 billion at 1st October 2015. So again, to reach the $2.1 billion of third-party assets AlphaCat reports at 1/1 impressive growth of $660m appears to have been achieved.

It’s possible, of course, that AlphaCat has launched a new sidecar, or that it has grown its ILS funds considerably for the 1st January. We may have to wait for the Validus Q4 2015 results to really see the AuM breakdown at AlphaCat, but it certainly looks like impressive growth has been achieved and fund-raising has been high on the agenda.