Peak Re to acquire ILS manager Lutece

Peak Reinsurance Company Limited (Peak Re), the Hong Kong headquartered global reinsurer that is majority backed by Fosun International, said this morning it has entered into a definitive agreement to acquire Bermuda-based insurance-linked securities (ILS) asset manager Lutece, which it will rename Peak Capital.

Lutece was launched back in 2017 by Erik Manning, an experienced ILS broking and structuring specialist who had worked at Aon Benfield, as well as Angus Ayliffe, who was previously the Chief Financial Officer (CFO) at reinsurance firm Ariel Re in Bermuda.

The pair launched Lutece with a flagship retrocession investment strategy for 1/1 2018 and built out a team to support its expanding underwriting and investment management operations in Bermuda, with a retro reinsurance focus.

Lutece then secured backing from and was acquired by Latin America focused asset manager BTG Pactual Asset Management in late 2018.

Peak Re has now stepped in and will acquire 100% of the capital of Lutece Holdings Ltd. and its subsidiary Lutece Investment Management Ltd., in a transaction expected to close in the coming weeks, subject to regulatory conditions.

Going forward, Peak Re will utilise the Lutece platform to expand its own operations in insurance-linked securities (ILS) and reinsurance investing.

The company said that, “Lutece will provide Peak Re with a platform for expansion into other areas of the ILS market. Lutece Investment Management will be renamed Peak Capital and will become a fully owned subsidiary of Peak Re.”

“The acquisition of Lutece carries Peak Re forward in its aspirations in ILS by bringing Lutece’s expertise in house. This will definitely be accretive to our capabilities in capital and third party capital management,” explained Peak Re CEO Franz Josef Hahn.

“We see opportunities from growing Asian risk exposures – Lutece’s professionals with ILS and structuring expertise, combined with Peak Re’s strong underwriting and operating franchise, will create new avenues for us to innovate for both customers and investors, working towards our ambition of narrowing the protection gap in Asia,” he added.

Lutece CEO Erik Manningalso said, “We are delighted to become a part of Peak Re and look forward to bringing our assets and areas of expertise to help strengthen Peak Re’s platform. Peak Re’s analytical-underwriting model is very much in keeping with the culture of Lutece, and with that foundation we are looking forward to helping to expand Peak Re’s ILS footprint.”

Peak Re has been exploring an expansion of its ILS strategy for some time.

The reinsurance firm launched the Lion Rock collateralised reinsurance sidecar vehicle in 2018 and this was upsized on in 2019.

The company sees the acquisition of Lutece and subsequent rebrand and launch of Peak Capital as an initiative to “enhance Peak Re’s capabilities and expand its ILS product suite.”