Leadenhall Capital Partners LLP, the London-based insurance-linked asset and fund manager, has announced that it is starting 2012 with assets under management of over $500m. The firm manages two Irish domiciled funds which invest in non-life insurance-linked securities and risks such as natural catastrophes have over the course of 2011 doubled their assets under management to approximately $250m. Leadenhall have also announced today a new commitment of UK£200m which will see them expand into the life insurance-linked arena.
The £200m commitment comes from a large UK pension fund. The pension fund has appointed Leadenhall to manage a segregated account of £200m of life insurance-linked investments, concentrating on life risks such as mortality. Leadenhall focuses on mortality risk in the life space and does not currently invest in longevity or life settlements.
Dan Knipe, Leadenhalls life portfolio manager, commented; “The life insurance linked investment market is poised for growth and we look forward to being a key part of that development. Life insurers wanting to make efficient use of their capital resources will continue to look for opportunities to transfer risk and relieve capital from the liability side of their balance sheets. Institutional investors, with their growing appetite for alternative assets, will be attracted by the diversifying properties of an investment which performs well as people live longer.”
Leadenhall see’s demand for life insurance-linked investments from pension schemes as a growing area as they offer a directionally opposite investment to the longevity risk a pension scheme holds in its liabilities. This can provide a natural hedge which may improve the risk-adjusted return profile of the investment they say.
Commenting on the progress made by the firm in 2011, Leadenhall CEO, Luca Albertini said; “In a testing year for the capital markets and for the insurance industry we managed to grow our business from just over USD100m to well over USD500m, to provide positive return to our investors and to balance our business with a similar weight of life and non-life insurance linked investments.”
John Wells, Chairman of Leadenhall, added; “Insurance linked investments are now a key constituent of alternatives investment strategies with a range of institutional investors across the world making significant investments in the area. Non-life and life linked strategies have both performed relatively well during the latest financial turmoil and address different risk and return targets of the investor community, although they can be complementary when taken together.”