ILS strategies in demand among alternatives & hedge funds in Q1 2018


Insurance-linked securities (ILS) and reinsurance linked investment fund strategies have received a very high level of interest from potential investors and investment consultants during the first-quarter of 2018, with some ILS funds coming out among the most searched for each month.

According to data from hedge fund and alternative investments database provider eVestment, ILS funds from Leadenhall Capital Partners and Nephila Capital both featured among the most searched for at times during the first-quarter.

eVestment’s platform is used by investors, investment managers and also consultants as a tool to screen alternative investment fund strategies and to perform background diligence on managers.

The aim is to help institutional investors to research alternatives and hedge funds, as well as stay ahead of emerging investment trends.

As a result, it’s encouraging to hear that ILS and reinsurance linked strategies are currently receiving a high-level of demand and interest from potentially new investors to the asset class.

At the start of this year, when the ILS sector was recovering from its heaviest losses on record, the fact ILS fund managers largely successfully recapitalised and came out with often larger AuM’s has helped to attract more investor interest.

Of course, also attracting investors to the ILS asset class was the fact that many observers and consultants were forecasting the availability of higher rates following the losses, which has served to heighten investors awareness of the opportunity to allocate more to or enter the ILS space in 2018.

In January, eVestment’s data shows that of the alternative investment funds viewed on its platform, the Leadenhall Diversified Insurance Linked Investments Fund PLC was the fifth most searched for during the month.

In February Leadenhall features again, with its Leadenhall Nat Cat Focus Insurance Linked Investments Fund and the Leadenhall Diversified Insurance Linked Investments Fund both featuring equal tenth on the eVestment platform. But in this month the Nephila Capital managed Iron Catastrophe Fund featured at sixth most viewed fund.

In March no insurance-linked securities (ILS) funds featured in the most viewed, but for the entire first-quarter of 2018 the Leadenhall Diversified Insurance Linked Investments Fund featured at equal eighth most-viewed alternative investment strategy, an impressive feat.

Of course, not all ILS funds are available through the eVestment platform, but what is most impressive is the fact that there are thousands of strategies available to research on it, including many of the world’s highest profile hedge funds and other alternative asset class fund strategies.

The fact that ILS funds have featured so heavily in the first-quarter suggests that right now institutional investor interest in ILS and reinsurance as an asset class is at an all-time high.

That bodes well for further ILS market growth throughout 2018 and beyond.

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