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Ohio Schools pension fund commits $30m to reinsurance & ILS through Nephila


Another U.S. public body pension fund has committed capital to the reinsurance-linked investment space in recent weeks, as interest in the reinsurance space continues to grow from large pension funds. The Ohio School Employees Retirement System, a defined benefit public pension fund that provides pensions and access to health care coverage Ohio’s school employees, has committed $30m to one of Nephila Capital’s investment funds, Triton Fund Ltd.

The Ohio SERS fund has around $9.9 billion of assets under management and had recently redeemed almost $60m of investments from two hedge funds which they felt had been underperforming, according to Pensions & Investments. Nephila’s Triton fund is one of the beneficiaries of the cash from these redemptions receiving $30m, with a multi-strategy fund from Archer Capital Management also receiving an allocation of $30m.

The Triton fund, established in 2005, is one of Nephila’s flagship reinsurance funds and contains a mix of instruments including 27% catastrophe bonds, 39% reinsurance, 2% industry-loss warranties (ILW’s), 23% County Weighted Industry Loss covers (CWIL’s) and 9% retrocession (allocation percentages as at the end of June 2012). The Triton fund is one of Nephila’s higher risk/return funds, with a target return of 10% – 15% above U.S. Treasuries and had just under $500m in assets under management at the end of June 2012, so will now be over $500m.

This is just the latest in a long line of pension funds allocating capital to the ILS and reinsurance sector via fund investments, a trend that is expected to continue to grow. Links to some of our articles detailing other pension funds allocations to the space can be found below.

RBS Group pension fund makes first allocation of assets to reinsurance

DaVinci Re sidecar takes investment from San Antonio state pension fund

UK council pension fund considering alternative investments including insurance-linked securities

Oregon Investment Council commit $100m to Nephila funds

Pennsylvania Schools pension scheme to invest in insurance-linked securities

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