Japanese primary insurance group Mitsui Sumitomo has acquired an 80% ownership stake in insurance-linked securities (ILS) specialist fund manager Leadenhall Capital Partners from its fellow MS&AD company MS Amlin.
The move sees the MS&AD Insurance Group Holdings, Inc. seeking to build on the ILS platform that Leadenhall’s management has created, to take advantage of new opportunities and also, we imagine, to allow Leadenhall to fully take advantage of opportunities that becoming closer to the Japanese group will bring.
Mitsui Sumitomo Insurance Co., Ltd. has acquired the 80% stake in Leadenhall from MS Amlin, with the firm saying it is “strengthening its ILS”, which it sees a primary unit of its overall Financial Services Business.
Leadenhall Capital Partners has been reorganised as a direct subsidiary of Mitsui Sumitomo, as a result of the move.
As a result, oversight from within the MS&AD world will shift to its Financial Business instead of the International Business operated by MS Amlin.
Mistui Sumitomo intends to work to realise greater synergies between the ILS business of Leadenhall and its own operations, while still maintaining the independence of Leadenhall Capital Partners, the firm said.
Further strengthening the ILS business of Leadenhall seems to be the main goal, which bodes well for the managers future growth potential.
Mitsui Sumitomo said that it intends to realise synergies by enhancing the appeal of ILS and alternative risk transfer products, as well as expand the range of ILS offerings in Japan and developing new ART solutions as well.
In addition, the move is expected to further enhance Leadenhall Capital Partners presence in the Japanese marketplace, with the goal of expanding assets entrusted to the ILS fund manager from Japanese investors.
Leadenhall remains 20% owned by the management team and Partners, ensuring the alignment with its clients and investors has not changed.
By shifting the ownership from MS Amlin to Mitsui Sumitomo, a group with significant experience in insurance and reinsurance related investing and broad access into Japanese institutional markets, Leadenhall stands to benefit significantly.
The move will help the ILS fund manager to not only expand its asset base that hails from Japan, but also to promote its ILS and collateralised reinsurance products to the Japanese domestic market more directly as well.
The Mitsui Sumitomo insurance related investment team have always had a liking for the ILS market and now they and Leadenhall can work together to broaden its appeal and maximise growth of the ILS fund managers reinsurance-linked investment strategies.