Swiss Re Insurance-Linked Fund Management

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F&C Asset Management now holds over 15% of Blue Capital Global Reinsurance Fund


Here’s some more evidence which shows the appetite that large independent investment managers have for reinsurance as an asset class right now. F&C Asset Management, a London Stock Exchange listed investment house, has increased its allocation to the Montpelier Re backed Blue Capital Global Reinsurance Fund to now hold just over 15% of the funds shares. The holding is split between two of F&C’s multi-manager funds under its Thames River brand.

We wrote just a couple of weeks ago about the growing appetite to gain exposure to reinsurance among UK based asset and investment managers, with it becoming increasingly popular as part of an alternative investment strategy within a balanced portfolio. The uncorrelated nature of reinsurance-linked investments together with attractive returns are proving too much for many investment managers to ignore.

We’ve also seen well-known investment manager Baillie Gifford take on 10% of the Blue Capital Global Reinsurance Fund back in December during the Blue Capital funds first launch offering of shares.

In this latest example of the growing appetite for reinsurance-linked investments among asset managers which was announced today, F&C has increased its holding in Blue Capital’s fund by acquiring an additional 300,000 shares. This took them from 14.8m shares to 15.1m, which is equivalent to 15.08% of the fund.

The investment is split between two of F&C’s multi-manager funds, with the Thames River Cautious Managed Fund holding 12.08% and the Thames River Balanced Managed Fund holding 3% of the Blue Capital Global Reinsurance Fund. The total investment makes F&C Asset Management one of the largest investors in the Blue Capital fund with approximately $15.1m worth of the $100.1m in size fund.

As more, what might be considered, mainstream asset managers get educated in ILS and reinsurance-linked investments there is the potential for capital inflows to the sector to increase quite significantly. We suspect more funds will be established to try to capitalise on this trend over the years to come. The only question remains whether the sector can supply enough investment opportunities to make the most of all of this interest and demand.

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