Neuberger Berman ILS raised $19.23m from recent NB Re share issuance

Neuberger Berman’s Insurance-Linked Strategies team raised a total of $19.23 million from the recent listed share issuance from its NB Reinsurance Ltd. Bermuda domiciled Class 3 reinsurance vehicle.

As we reported yesterday, NB Reinsurance Ltd., which is operated by global asset manager Neuberger Berman’s insurance-linked securities (ILS) unit, completed a new issuance of 100,000 shares, which as we said at the time were likely to be used to support new capital raising activities.

While 100,000 shares were actually issued at a par value of $1 per share, the initial capital raise featured only 19,231 of them being sold to investors at $1,000 per share, raising $19.231 million for a Neuberger Berman run ILS investment  strategy.

Of course that leaves the remaining shares left to be allocated to investors that may like to subscribe to this ILS strategy.

The company explained that NB Re manages what it terms a unique insurance-linked securities (ILS) strategy, providing relatively uncorrelated returns compared to traditional asset classes, while also providing greater transparency and reduced counterparty risk, than other insurance-linked strategies.

“We are pleased to have received approval from the BSX to be able to bring this innovative structure to our clients,” commented Charles Mixon, Managing Director of NB Insurance-Linked Strategies. “We’d like to thank the team members at the BSX for their support in this listing, as well as our various service providers in Bermuda, such as our listing sponsor, Clarien BSX Services, legal advisor, Conyers Dill & Pearman, and insurance manager, Horseshoe Group.”

Alex Conyers, Vice President of NB Re, added, “We believe this transaction represents an important milestone with positive implications for the ILS asset class in Bermuda, further cementing its place at the center of convergence for the insurance and capital markets.”

As we explained in our article yesterday, the NB ILS strategy likely features similar attributes to the one operated under this ILS teams previous owner and branding of Cartesian.

In the past this ILS team had offered listed shares in their underwriting vehicle as a way to enhance potential liquidity opportunities for institutional investors while also offering enhanced transparency by providing a publicly reported net asset value for the listed share class.

We assume this new share issuance under NB Re may benefit from similar attributes, providing a more liquid and transparent entry point to the insurance-linked securities (ILS) asset class, while accessing the returns of the collateralized reinsurance and often industry loss warranty (ILW) focused investment strategy of Neuberger Berman’s ILS team.

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