Indiana state pension adds $50m to Aeolus ILS fund allocation

The Indiana Public Retirement System, a state pension fund with over $38 billion of pension related assets under management, has expanded its investments in funds managed by ILS and reinsurance focused investment manager Aeolus Capital Management.

The pension fund has been invested in insurance-linked securities (ILS) for some years, having had allocations to Nephila Capital, Aeolus Capital Management and Hudson Structured Capital Management to-date.

The pension dropped its allocation to a Nephila Capital fund in 2019, as it sought greater diversification within the ILS asset class and added a $100 million allocation to Hudson Structured in its place.

That took the pensions overall allocation to ILS to somewhere around $222 million in the second-half of 2019.

Now, it’s become apparent that the Indiana Public Retirement System investment team has topped up its allocation to Aeolus’ Property Catastrophe Keystone PF Fund, investing a further $50 million at the end of 2019.

The $50 million allocation came from the pension fund’s hedge fund portfolio, which is around $3 billion of its overall assets.

According to Pensions & Investments, who first reported the story based on trustee board meeting documents, after this fresh $50 million addition the Indiana state pensions’ allocations to ILS and reinsurance through this specific Aeolus managed ILS fund reached $95 million at the end of 2019.

It’s not currently clear where the Indiana Public Retirement System’s overall ILS and reinsurance related allocations currently sit, in terms of size.

Having previously been around $222 million, it appears the pension’s overall ILS allocation may have shrunk slightly during the second-half of 2019, possibly due to the effects of the catastrophe losses experienced across the reinsurance and ILS market in recent years.

The Indiana Public Retirement System is just one of the numerous pension fund and major ILS investors we track in our directories here.