Swiss Re Insurance-Linked Fund Management

Original Risk: A Society for Change Agents

BTG Pactual hires Lutece team, sees “significant opportunities” in ILS


Global markets and Latin America focused asset manager BTG Pactual Asset Management has hired the team from retrocession and reinsurance focused specialist investment manager Lutece Investment Management Ltd.

Lutece was founded initially by Erik Manning, an experienced ILS structuring and broking specialist who had most recently been with Aon Benfield, alongside Angus Ayliffe, who was most recent Chief Financial Officer (CFO) at reinsurer Ariel Re in Bermuda.

The pair had launched Lutece with a retrocession strategy at 1/1 2018 and begun building a team to support the underwriting and investment management operations in Bermuda.

The relationship with BTG Pactual had already been cemented, as the Brazilian bank and global asset management firm had backed Lutece Re with its own funds and those of third-parties at its launch earlier this year.

The investment firm has approximately $49.5 billion in assets under management and now adds insurance-linked securities (ILS) to its client offering, as it sees an opportunity in the sector by aligning itself with an experienced team of reinsurance veterans.

BTG Pactual is deepening the relationship by effectively bringing Lutece onboard as its in-house specialist ILS investment management unit and launching a strategy named Retro Opportunities.

“The Lutece team is a great addition to our organization. This exciting move will enable us to generate returns uncorrelated to traditional credit markets and existing revenue streams,” explained Steve Jacobs, CEO of BTG Pactual Asset Management. “Reinsurance is a market that BTG Pactual knows well and in which we have a history of investment. We see significant opportunities in the insurance-linked securities sector, and are now well positioned to take advantage of these through our expanded capabilities.”

The now BTG Pactual Asset Management reinsurance team will manage the Retro Opportunities strategy, allocating capital to what it hopes will prove a “high-yielding retrocessional segment.”

More strategies are planned, with a low volatility reinsurance strategy expected to launch later in 2018 that will focus on investing in the senior and super-senior tranches of reinsurance company regulatory capital.

The reinsurance investment strategies will be overseen by an Investment Committee made up of senior management from BTG Pactual and Lutece and the reinsurance team will leverage BTG Pactual’s scale, governance, risk management and operational infrastructure as it develops the new business.

So Lutece did not remain independent for long, but the alignment with an experienced investor in insurance and reinsurance, with the scale of a global asset manager, makes perfect sense for the Lutece team and will provide a platform for growth that would have been harder to achieve on their own.

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