Leadenhall raises over $600m for life ILS strategies

Leadenhall Capital Partners LLP, the London headquartered specialist insurance-linked securities (ILS) and reinsurance linked investment manager, has significantly increased the size of its life insurance-linked securities (ILS) strategies this year, raising more than $600 million for them in the second-half of 2018.

The fresh capital raised for the life ILS strategies has helped Leadenhall to boost its overall life ILS assets under management to $2.5 billion, positioning the investment manager as one of the most balanced in ILS (across P&C and Life risks), given its total asset bases sits just above $5.2 billion (as of July this year).

Leadenhall has been experiencing strong investor demand from clients looking to gain exposure to the life insurance linked asset class, with its experienced and proven track record in the space helping to attract new inflows.

The company said that most of the new capital has been raised to meet the opportunities available in the market and Leadenhall sees a healthy supply of private transactions available to underwrite and invest in across the life sector.

Dan Knipe, Partner & Head of Life Investments, commented on the capital raising activities, “Leadenhall’s solution based approach and our long-standing commitment to the life and health sector continues to provide a key competitive advantage for us in originating investment opportunities in private markets to satisfy investor appetite for biometric and behavioural risks”

The investment manager intends to allocate the capital across life embedded value, health, lapse risks and other life insurance and reinsurance linked investment opportunities.

Here Leadenhall can leverage its relationship with joint venture partner re/insurer MS Amlin to enhance its access to life insurance and reinsurance business, we’d imagine.

Lorenzo Volpi, Partner & Head of Business Development, commented, “Investors continue to look for alternative products offering diversifying sources of yield; the increased capital demand of life insurers driven by liquidity requirements and enhanced regulations, like. Solvency II, is providing a very interesting investment opportunity”.

Leadenhall offers a range of life insurance and reinsurance linked investment vehicles, ranging from tailored segregated managed accounts to open ended and closed ended funds.

The company sees its investor base as institutional in nature, with significant interest continuing to be shown by pension funds around the globe.

“Some of these groups of investors would prefer not to have longevity risk within their life portfolios but this is not universal and Leadenhall’s life franchise caters for investor appetites across the risk and return spectrum,” Volpi added.

This is an important point for investors to note, as the life ILS asset class now contains a wide range of investment opportunities, providing opportunity for a broadening range of investors.

By tailoring their investment strategies to also suit institutions that do not find longevity risk attractive, as they often hold a significant amount of this risk already from their own pensioner cohorts, Leadenhall can make the life ILS asset class more attractive to a broader range of pension fund and other institutional buyers.