PFZW allocation target rises for Mt. Logan strategy, shrinks for Munich Re & Swiss Re sidecars

The target investment allocation range for the Mt. Logan Capital Management, Ltd. quota share structure named Scenery Re has been increased for the insurance-linked securities (ILS) portfolio managed by PGGM, the Dutch pension fund investment manager, on behalf of its end-client pension PFZW.

This comes as two of the private collateralized reinsurance sidecar structures that PFZW has been investing in are reportedly being downsized, resulting in the pension fund’s target allocation ranges for Munich Re and Swiss Re operated sidecars now having shrunk.

PGGM, the Dutch pension investment manager first allocated US $200 million to Scenery Re on behalf of its client pension PFZW in 2024, with the vehicle managed by Everest-owned specialist third-party reinsurance capital management unit Mt. Logan Capital Management.

When the Scenery Re investment was introduced, the target allocation range was reported at between EUR 50 million and EUR 250 million, so aligned with the US $200 million initial investment into the structure.

Now, the latest disclosure from Dutch pension fund for the care and welfare sector PFZW shows that its target investment allocation range for the Mt. Logan Capital Management operated Scenery Re has been increased, to now between EUR 250 million and as much as EUR 500 million.

It’s not clear how large the investment currently is. But, with the bottom-end of the range now having increased to more than the US $200 million initial investment in Scenery Re, it seems that a larger investment has likely been made in the Mt. Logan managed quota share reinsurance structure for 2026.

Which shows PGGM and PFZW looking to maintain the investments into quota share partnerships with large global reinsurance companies at a time when some of its partners have been downsizing their sidecars and reducing their use of retrocession.

Some of the world’s largest reinsurers have been reducing their use of retrocession and in certain cases the size of their sidecar vehicles, as they look at manage their catastrophe risk exposure while retaining profits from this underwriting business.

As we reported back in February, Munich Re was the first to reveal a desire to retain more of the economics of its re/insurance business, by slashing its retrocession arrangements and scrapping its collateralized reinsurance sidecar programme.

A day later, Swiss Re also said that it had reduced its external catastrophe retrocessional protection for 2026, although at the time it did not say whether this included any sidecar structures.

Other reinsurers have taken a different route, with some increasing their retrocession purchases this year.

But, with those stories in mind when it comes to Munich Re and Swiss Re, it’s less of a surprise to learn that the PGGM / PFZW giant ILS portfolio now has reduced allocation target sizes for reinsurance sidecar structures linked to these two companies.

Munich Re said it was scrapping its collateralized reinsurance sidecars. The PFZW pension’s target size for its allocation to the Leo Re structure, which is a quota share with that reinsurer, has now been reduced from a stated EUR 500 million to EUR 1 billion in previous quarters, to now just EUR 50 million to EUR 250 million.

Again, given Munich Re said it was shuttering its sidecars, it’s likely this investment is now shrinking over time as the sidecar portfolio gets run-down and PFZW’s existing investments into it reach their term.

On Swiss Re, the PFZW pension had an investment into that reinsurer’s Viaduct Re private sidecar vehicle, that was previously given an allocation target range of between EUR 500 million and EUR 1 billion as well.

Now, as of the end of the first-quarter of this year, the target allocation range for Swiss Re’s Viaduct Re sidecar vehicle is stated at a much smaller between EUR 50 million and EUR 250 million.

It’s important to note that Swiss Re had not said it was shuttering any of its sidecars, so this investment may still be ongoing for the 2026 underwriting year, just at a reduced size. But given the reinsurers’ statement on reducing its retrocession, it seems that strategy may have been applied to certain quota share third-party capitalised structures as well, as risk sharing is more closely managed.

Which makes sense, as major reinsurers have always flexed the size of sidecar structures alongside the market cycle, to maximise their efficiency and ensure adequate profits from the underwriting business is being retained.

Conversely, it seems Everest’s Mt. Logan Capital Management has been a beneficiary of an increased investment allocation into Scenery Re, as the company continues to built on its partnership with investment manager PGGM and its client pension PFZW.

The latest update from pension PFZW shows the following target allocation ranges as of March 31st 2026, which include the latest changes to the disclosure:

• Fermat Capital Management: Managed account. Catastrophe bond allocation. Target: EUR 1bn – 2.5bn.
• Nephila Capital: Tyche Catastrophe Fund. Private contracts. Target: EUR 500m – 1bn.
• Elementum Advisors: Theia Catastrophe Fund. Private contracts Target: EUR 250m – 500m.
• AlphaCat Managers: Soteria Fund. Private contracts (presumed in run-off). Target: EUR 0m – 50m.
• Munich Re: Leo Re. Private contracts. Target: EUR 50m – 250m.
• AXA XL ILS: Daedalus I Fund. Private contracts. Target: EUR 500m – 1bn.
• RenaissanceRe: Vermeer Re. Private contracts. Target: EUR 1bn – 2.5bn.
• PartnerRe: Huygens. Private contracts. Target: EUR 250m – 500m.
• Swiss Re: Viaduct Re. Private contracts. Target: EUR 50m – 250m.
• SCOR: Concordia Re. Private contracts. Target: EUR 250m – 500m.
• Aeolus Capital Management: Ashlar Fund. Target: EUR 250m – 500m.
• Nightingale Re: Private contracts. Target: EUR 250m – 500m.
• Integral ILS: Riemann Fund. Private contracts. Target: EUR 50m – 250m.
• Mt. Logan Capital Management: Scenery Re. Private contracts. Target: EUR 50m – 250m.

Overall, the target remains to hold from EUR 5 billion to as much as EUR 10 billion in ILS and reinsurance related investment exposure within the allocations across all these ILS managers and structures.

As we reported last month, the insurance-linked securities (ILS) and reinsurance investments portfolio managed by PGGM on behalf of PFZW delivered a 12.4% return in USD for full-year 2025, while its assets ended the year at a valuation of just over US $8.9 billion.

PGGM, acting on behalf of its client PFZW, remains the largest single investor listed in our directory of pension funds and sovereign wealth funds investing in ILS and reinsurance.