Elementum launches higher risk ILS strategy with investor mandate

Elementum Advisors, LLC, the insurance-linked securities (ILS) fund management and collateralised reinsurance underwriter, has announced the launch of a new higher risk investment strategy that will have a retrocession focus.

Elementum Advisors said today that it has launched the new mandate with backing from a large institutional investor focused on collateralized reinsurance investments (CRI) with a higher risk and return profile.

The new strategy will tap into Elementum’s established counterparty relationships, leveraging its structuring and modeling capabilities, to deliver an ILS investment strategy with a higher risk and return profile than the manager has typically offered.

The new strategy doesn’t mean any change in focus for Elementum as a firm though, saying that it will “remain steadfast to the core principles of its long-established investment approach.”

“This new investment structure is an extension of our broader value proposition within the insurance-linked securities sector,” explained Tony Rettino, Founding Partner and Senior Portfolio Manager at Elementum. “It enables us to provide capital across an even wider range of the risk and return spectrum and ultimately increase the capital we deploy to riskier tranches of investment opportunities.”

Elementum launches this new mandate at a time when it continues to expand its activities and expertise in retrocessional reinsurance, including with the hire of Shabnam Ahmed as Senior Vice President, Underwriting in its Bermuda office in October 2020.

“We have been evaluating the market for some time to determine the most appropriate time for entry,” Paul Barker, Partner and Portfolio Manager at Elementum commented. “The current attractiveness of the investment environment in combination with the unique opportunities available in higher risk investments signaled that the time was right to pursue this strategy.”

Yesterday, Elementum Advisors also announced a key hire, as it added Todor Todorov, who most recently worked at Willis Towers Watson in its Investment Manager Research team, to a Business Development & Investor Relations role.

Elementum is not the only ILS manager to write more higher returning, retrocession and reinsurance business of late.

With the market having firmed, most noticeably in retro, ILS investment managers have been allocating a little more capital to the space and new capital has also been introduced by collateralized startups that have come to market with a particular retro focus at 1/1.