Global insurance and reinsurance firm Aspen’s collateralized reinsurance sidecar Silverton Re looks to have achieved 12% performance in the first six months of 2014, according to the firms quarterly results published yesterday.
The Silverton Re sidecar is managed, along with other third-party reinsurance capital vehicles, at Aspen’s alternative capital management and insurance-linked securities (ILS) focused unit Aspen Capital Markets. The unit had around $125m of capital under management by the end of the first quarter.
Aspen’s Silverton Re fully-collateralized sidecar was launched with $50m of third-party reinsurance capital and $15m of capital from Aspen, taking it to $65m in size.
Investors in the Silverton Re sidecar bought participation notes in the vehicle, in order to access a share of the vehicles underwriting returns. According to the Aspen financial report, the value of the debt issued by Silverton Re, which is in essence the investors participation, increasing from the $50m at 31st December 2013 (at launch) by 6.8% to $53.4m by the end of the first quarter 2014, then increasing again by 4.9% to $56m by the end of the first half. That’s a 12% performance for the first six months of 2014, which investors will no doubt be delighted with.
So the investors in the Silverton Re sidecar at its launch will have seen the value of their participation notes increase by roughly 12% during the first half of this year. With performance likely to increase in line with seasonality over the wind season, investors may look forward to even better performance through the rest of the year, if Silverton Re can remain free of losses.
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.