Swiss Re Insurance-Linked Fund Management

Original Risk: A Society for Change Agents

LGT Capital Partners restructures insurance-linked securities (ILS) operations


Swiss private banking and asset management firm LGT Group has restructured its actively managed insurance-linked securities (ILS) and reinsurance linked investment business under a new entity named LGT ILS Partners Ltd.

The reason for this change, according to a statement sent out to LGT’s investor base, is to provide a clear separation between the actively managed ILS fund management work, of the ex-Clariden Leu ILS team that was acquired by LGT Capital Partners, from the fund-of-fund investments business of LGT Capital Partners Ltd. which is popular with third-party fund managers.

LGT ILS Partners Ltd. is a limited-liability company based in Switzerland and part of LGT Group. The company has received its license from the Swiss Financial Market Supervisory Authority (FINMA) to be active as regulated asset manager for collective investment schemes.

The ILS funds managed by the team remain part of the fund suite of LGT Capital Partners Ltd and LGT Capital Partners Ltd. remains the funds distributor. The newly created company LGT ILS Partners Ltd. is effectively the fund manager for the LGT Capital Partners Ltd. ILS funds now.

The existing LGT Insurance-Linked Strategies portfolio management team of will transfer in full to the new legal entity. Investment processes, the investment style as well as all the funds currently managed by the team will remain unchanged and are not affected in any way by the change.

The firm sees this as the final step, in organising the ILS business within LGT, in the process which began when LGT acquired the insurance-linked investment business from Clariden Leu in early 2012.

Approval for the change and for making LGT ILS Partners the official investment manager of all the LGT ILS funds and ILS mandates is expected by year-end.

LGT ILS Partners Ltd. stated; “This change of the investment management competencies to the newly formed legal entity LGT ILS Partners Ltd. concludes the transition of the ILS team from the former set-up at Clariden Leu to LGT Group. We are excited about this transfer and look forward to a seamless continuation of the investment activities in the new legal structure.”

LGT now has approximately $3.9 billion of insurance-linked and ILS assets under management, between the actively managed ILS funds of LGT ILS Partners and the fund-of-funds operations of LGT Capital Partners.

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