Swiss Re Insurance-Linked Fund Management

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ILS investment manager Twelve Capital grows assets to over $1 billion


Swiss based investment manager Twelve Capital, which operates a number of funds and investment opportunities in insurance-linked securities, catastrophe bonds, private ILS, reinsurance-linked contracts and subordinated insurance bonds, has published an update today disclosing that it now manages over $1 billion of insurance-linked assets. Twelve experienced impressive growth during 2012 and doubled its workforce to manage the increased commitments from investors.

Of the $1 billion plus that Twelve Capital manages around half is invested across insurance-linked securities, private ILS or reinsurance-linked contracts. The remainder is invested in the other insurance-linked asset class that Twelve Capital specialise in, hybrid insurance debt instruments.

In comments made within a corporate statement released today, Twelve Capital’s Chairman Dr. Urs Ramseier said that the firms success could be attributed to the hard work of its team and strategic partnerships with XS Investments and Bank Sarasin. XS Investments have held a small investment in Twelve Capital since the firms launch and assist the firm with product distribution. Bank Sarasin and Twelve Capital have a partnership which was expanded in 2012 and sees Twelve Capital act as investment manager for a number of Bank Sarasin branded ILS investment products.

Twelve Capital’s flagship ILS fund, the Twelve ILS Fund, performed admirably in 2012 with positive returns every month (despite Sandy) and an annual return of 6% across the year. Commenting on the cat bond market, the investment manager said that it expects the market will continue to offer attractive investment opportunities and that Twelve Capital “expect to witness robust net market growth” in 2012. The investment manager added that it feels it important that the cat bond market develop further and innovate, through the introduction of new sponsors, perils and geographic regions.

As well as investing directly in cat bond and ILS transactions, Twelve Capital offers private ILS investment solutions where it originates and structures reinsurance transactions itself. Twelve Capital sees its work on private ILS deals as an area that the firm has a competitive advantage and it provides greater diversification opportunities and enables it to broaden the scope of its offerings. In 2012 the Twelve Capital team saw details of over 200 investment opportunities, 50 of which it reached the due diligence stage on and 30 of which were completed. Twelve Capital’s private ILS focus is not purely on catastrophe business, but allows them to participate in lines of business such as aviation, marine and satellite risks.

In 2013 Twelve Capital sees an opportunity to broaden the scope of the business they invest in, citing areas such as fire-per-risk, marine and aviation as potential areas for expansion into. Twelve Capital aims to broaden the scope of ILS by developing new products and structures which suit the ILS third-party capital strategy as well as the needs of sponsors and those seeking coverage.

Dr. Urs Ramseier, Chairman of the Board of Twelve Capital, commented; “We are delighted with the success we achieved in 2012, not only in terms of our superior investment performance but also the surge in net new assets we recorded during the financial year. Moreover, we were able to recruit a number of key individuals from the Zurich and London financial centres, which has made it possible for us to grow from being a start-up to what today is a medium-sized asset management company.”

Over the course of 2012 Twelve Capital doubled the size of its team from 8 to 16, making a number of key hires. You can read more about these appointments in our articles published at the time:

Twelve Capital bolsters insurance-linked securities team with underwriting and modelling hires (July 2012)

Twelve Capital adds two senior portfolio and operations hires (November 2012)

ILS investment manager Twelve Capital reshuffles and adds board members (December 2012)

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