Swiss Re Insurance-Linked Fund Management

Original Risk: A Society for Change Agents

OppenheimerFunds acquired by Invesco, creates $1.2 trillion asset manager


OppenheimerFunds, Inc, the investment manager that operates a catastrophe bond strategy and is in the process of launching an insurance-linked securities (ILS) interval mutual fund, is being acquired by investment giant Invesco, with the combined entity set to be a $1.2 trillion powerhouse in asset management.

Invesco is effectively acquiring OppenheimerFunds from current owner insurer MassMutual, with MassMutual set to become a significant shareholder in Invesco after the event and the pair looking to explore new synergies to work more closely together.

Oppenheimer has been active in the insurance-linked securities (ILS) and catastrophe bond investments space for over a decade, having launched its flagship Oppenheimer Master Event-Linked Bond Fund, which allocates its investor capital to catastrophe bonds, in June 2008.

In the last year Oppenheimer has been building out a team and platform to allocate investor capital to collateralized reinsurance, private ILS structures including quota shares, and other less liquid ILS instruments, as it looks to expand its presence in the sector.

This strategic shift seems to be culminating in the launch of the Oppenheimer ILS Interval Fund, which the company first filed documentation for in June this year, a decade after the groups first pure cat bond fund launch.

Now, OppenheimerFunds becomes part of a much larger asset management powerhouse, which will give the managers of the cat bond and ILS fund strategy access to a much larger investor base and the potential to raise more assets for their ILS strategies as a result.

“The combination with OppenheimerFunds and the strategic partnership with MassMutual will meaningfully enhance our ability to meet client needs, accelerate growth and strengthen our business over the long term,” Martin L. Flanagan, President and CEO of Invesco commented on the deal.  “This is a compelling, highly strategic and accretive transaction for Invesco that will help us achieve a number of objectives:  enhance our leadership in the US and global markets, deliver the outcomes clients seek, broaden our relevance among top clients, deliver strong financial results and continue attracting the best talent in the industry.”

There’s that word relevance again, which is so often heard in reinsurance and ILS circles. It’s also clearly important in global asset management as well.

“We have long held OppenheimerFunds’ people and strong investment performance track record in high regard,” Flanagan continued.  “OppenheimerFunds’ culture and commitment to high-conviction investing complement our own, and the combination will create significant opportunities for the talented professionals of both companies.”

With this deal Invesco becomes the 13th largest asset manager in the world and the sixth-largest US retail investment manager.

The company said this increase in scale will help it connect more customers with its active, passive and alternative capabilities, which of course now includes ILS and reinsurance linked assets for Invesco as well.

Invesco sees OppenheimerFunds strategies as complimentary and in asset classes like ILS there will be little to no crossover at all, suggesting the ILS team from Oppenheimer only stands to benefit from the enlarged platform and reach this deal will provide.

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