Hudson Structured Capital Management Ltd., the insurance-linked securities (ILS), reinsurance- and transportation- focused investment manager, has increased its reinsurance and ILS AuM by roughly 30% in 2020 so far, lifting it to more than $2.6 billion at December 1st.
Firm-wide, including the transportation related investments strategy managed by Hudson Structured, commitments and assets under management now sit at over $3 billion.
Hudson Structured, which undertakes its insurance related investing business as HSCM Bermuda, was launched and began investing in 2016, having been established by ex-Goldman Sachs structured finance head Michael Millette.
The firm has been steadily expanding its insurance and reinsurance related investment strategies over the last few years, managing to achieve continuous growth through a period when some other ILS funds have stalled, or even experienced some shrinking in terms of assets under management.
Hudson Structured has been assisted here by its more diversified approach to investing in reinsurance, as it targets returns from across the market chain and company balance-sheet, allocating capital across a wide range of lines of insurance business, structures and investment opportunities.
As of December 1st, the reinsurance and ILS investment strategies have pulled in over $600 million of inflows through 2020, to reach above $2.6 billion of commitments and assets just in advance of the key renewal season.
In fact, firm-wide the company has added over $600 million in new investor commitments in the fourth quarter of 2020 alone, across both reinsurance and transportation funds.
“There are exciting investment opportunities across the re/insurance landscape right now,” Millette explained.
“Disruptions are creating value in property catastrophe, specialty lines, life & health, runoff markets, insurtech, and throughout the distribution and services value chain. We are excited to be able to put capital to work in this environment,” he added.
The additional capital raised through this year has helped Hudson Structured build on its reinsurance and ILS portfolios for its investors and will position the company to play an even bigger role at the renewal seasons in 2021 and beyond.
On the transportation side, in which the company sees similar opportunities to reinsurance, in terms of being a growth sector that is shifting its financing from balance-sheets to market sources, growth has also been healthy and the firm sees ongoing attractive investment potential.
The HSCM Transport strategy is focused on equipment-backed investments across sector classes such as aviation, shipping, and surface transport, and is led by company Co-Founder and former PIMCO executive David Andrews.
This strategy has now reached more than $380 million in commitments and assets under management.
“We have arrived at a once-in-a-generation moment for transportation investing. As transport markets recover from what was a catastrophic 2020, we believe opportunities across aviation, shipping and surface transport will be among the best we have seen this century,” Andrews said.
Back to the reinsurance side, where HSCM Bermuda has a mandate to allocate capital across all aspects of insurance and reinsurance linked returns, including ILS and catastrophe bonds, collateralized reinsurance and retrocession, insurtech, private debt, and legacy opportunities. This broader and more diverse strategy remains relatively unique in the marketplace and is clearly proving attractive to investors.