Global re/insurer Aspen’s collateralized reinsurance sidecar vehicle Silverton Re has seen its long-term debt, which was issued to third-party investors, increase in value from $70.7m at the start of the year to $76.2m at 30th June, a 7.8% increase.
Aspen renewed its Silverton Re collateralized reinsurance sidecar for 2015 at the start of the year, with $85m of capital, made up of $70m of third-party capital with the remaining $15m still contributed by Aspen itself.
For the Silverton sidecar renewal, Aspen raised the $70m of third-party capital from investors for Silverton Re in December, through the issuance of Series 2015-1 Participating Notes, which mature on September 18, 2017.
According to the insurance and reinsurance firms results, those Silverton sidecar loan notes were worth $70.7m at the 31st December 2014. The Silverton loan notes had increased in value by 7.8% to $76.2m at the 30th June 2015, which with the additional $15m of notes that Aspen bought, which may now be worth approximately $16.17m (at a similar 7.8% increase).
That would take the size of the Silverton Re reinsurance sidecar, based on the value of its outstanding 2015-1 participating loan notes, to around $92.4m.
The 7.8% increase, by our calculations based on the value of the Silverton Re loan notes in Aspens quarterly report, is roughly aligned with increases in value of the 2015-1 notes reported by Stone Ridge Asset Management.
In its interim report as at the 30th April, Stone Ridge had reported that $14m of Silverton Re 2015-1 notes had increased in value to $14.97m, which is a 6.4% increase (from cost) over the first four months of the year.
Aspen was managing around $185m of third-party capital from investors at the start of this year, a number that is sure to have grown. The performance of the Silverton Re participation notes will certainly help Aspen to attract investors to its convergence strategies.
It’s worth noting that this is not the pure underwriting return, rather it is the performance in the value of the debt notes issued to investors by Silverton Re.
For more on sidecar investments view our list of collateralized reinsurance sidecars.