Leadenhall targets conservative ILS investors with remote risk strategy

London-headquartered specialist insurance-linked securities (ILS) and reinsurance linked investment manager Leadenhall Capital Partners LLP has launched a new remote risk ILS fund strategy that targets more conservative investors, with $22.5 million of capital secured at the start of the year.

Leadenhall, which had $4.7 billion of ILS and reinsurance linked assets under management as of January 1st 2018, launched the Leadenhall Remote Risk Insurance Linked Investments Fund ICAV at the start of the year as an offering to satisfy the needs of investors not seeking higher risk and returns from ILS allocations.

With this new ILS fund strategy Leadenhall looks to optimise the risk and return profile of the portfolio within the constraints of specified investment guidelines and by focusing on the lower-risk layers of insurance-linked risk towers. The fund targets a return to investors in a range from 3% – 4%.

Many institutional investors in ILS are not seeking double-digit returns. In fact a stable and low-volatile low single-digit return is often enough for investors that are also seeking a relatively uncorrelated and diversifying source of investment return.

Hence lower-risk ILS fund strategies, such as this new one from Leadenhall, can generate interest from large investors.

Remote risk ILS fund strategies are also a good way for investors new to the asset class to try out the sector in a vehicle designed to have lower risk and volatility attached to it.

Luca Albertini, CEO of Leadenhall Capital Partners, explained to Artemis, “The strategy has been launched to complement our offering at the more remote levels, where our current funds and managed accounts do not naturally play.

“The remote fund fits investors with a conservative risk appetite as well as those willing to spread their investments across a range of insurance linked risk profiles.”

The manager will be looking to build on the initial $22.5 million of assets it raised for the remote risk ILS fund.

Albertini said that there is no fund-raising target for this new open-ended strategy, but added that Leadenhall would stagger subscriptions in-line with the expected capacity requirements at reinsurance renewals.