BTG Pactual sets up SSPE (Brazil ILS structure) to issue Letras de Risco de Seguro (LRS)

BTG Pactual, a major global investment bank and asset manager headquartered in Brazil, has established an insurance-linked securities (ILS) structure named BTG Pactual Sociedade Seguradora de Propósito Específico S.A. (BTG Pactual SSPE) to issue Letras de Risco de Seguro (Insurance Risk Letters), Brazil’s own-brand of ILS instrument.

BTG Pactual becomes the fourth owner of an SSPE structure in Brazil, through which it can issue and facilitate issuance of Letras de Risco de Seguro (LRS).

The investment bank is well-known in the reinsurance space, having invested in a number of ventures through its asset management arm, while also providing services to insurers and reinsurers across Latin America and in other locations worldwide.

In addition, BTG Pactual has had an interest in the insurance-linked securities investment market in the past, having acquired Bermuda based reinsurance linked investments manager Lutece Re Ltd. back in 2018, which was later acquired in 2020 by Hong Kong headquartered reinsurer Peak Re and became Peak Capital.

Now, with activity picking up in Brazil’s ILS market as an increasing number of Brazilian LRS deals have now been completed, BTG Pactual has stepped in to establish its own structure that can issue these insurance-linked notes.

The Superintendence of Private Insurance (SUSEP), Brazil’s regulator, has now authorised BTG Pactual Sociedade Seguradora de Propósito Específico S.A. (BTG Pactual SSPE) to issue Letras de Risco de Seguro (LRS or Insurance Risk Letters), with the SSPE having initial share capital of R$ 3,000,500, with 3,000,500 ordinary, nominative and unnamed shares.

BTG Pactual SSPE is now authorised to conduct insurance, reinsurance and retrocession business, while issuing LRS’ (insurance risk letters or notes) to investors that effectively enable the risks to be collateralized, just like any ILS arrangement elsewhere in the world.

BTG Pactual now becomes the fourth owner of an SSPE structure in Brazil, which will enable the investment bank to arrange and issue LRS transactions in the country.

The first SSPE structure in Brazil was IRB (Re)’s vehicle Andrina SSPE and this entity issued the first LRS transaction under the regulatory regime, which as we reported last week has now renamed as IRB SSPE.

Gálapagos Capital SSPE, owned by global investment company Galapagos Capital, completed its R$100 million first LRS issuance in December 2025. After which Galapagos Capital SSPE issued its second arrangement under the Brazilian insurance-linked securities regime in early 2026 and then facilitated its third issuance in May 2026, a R$126 million offering of LRS which was the first broadly distributed LRS arrangement since Brazil put its own ILS regulations into law.

The third ILS structure under Brazil’s regulations was Ariel SSPE, established in Brazil earlier this year to target this now growing domestic Brazil ILS marketplace.

Now BTG Pactual SSPE makes it four and this sees one of the biggest investment banks and asset managers in Brazil recognising the opportunity to get involved in the LRS issuance pipeline, which bodes well for continues ILS activity in the country.

You can find all our coverage of Brazil’s ILS regime under this archive.