The New Mexico Educational Retirement Board, a near $13.5 billion pension fund for the state of New Mexico’s education sector employees, is reported to have allocated an additional $25 million to insurance-linked securities (ILS) fund manager ILS Capital Management.
The New Mexico Educational Retirement Board already had a roughly $125 million allocation to ILS Capital Management’s flagship 1609 Fund, which invests across multiple classes of reinsurance business on a collateralized basis.
The pension fund first allocated to the ILS Capital 1609 investment fund at the beginning of 2018, earning a double-digit return in its first year of investing with the ILS fund manager.
Now, it’s been reported by Pensions & Investments magazine that the New Mexico Educational Retirement Board is seeking more exposure to collateralized reinsurance returns and at a recent meeting of its investment committee approved a further $25 million allocation to ILS Capital.
ILS Capital Management’s 1609 Fund generates its returns by investing in collateralized reinsurance contracts across geographic regions and lines of business including property, marine, energy, crop, aviation, aerospace, and weather.
As a result, it’s a broader investment strategy than many available in the ILS fund market, offering access to diversifying returns outside the more typical property catastrophe reinsurance space.