PIMCO raises another near $100m for its ILS Series SPC fund

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Investment management giant PIMCO has continued to build on activities within its relatively recently launched dedicated insurance-linked securities (ILS) operations PIMCO ILS, with more capital flowing to its ILS fund for this renewal.

PIMCO building logoPIMCO (Pacific Investment Management Company LLC), the $1.76 trillion asset manager arm of insurance giant Allianz S.E., launched the PIMCO ILS Business in January, announcing the appointment of Rick Pagnani to lead the new insurance-linked securities (ILS) operation.

The build-out of the PIMCO ILS platform has not been a rushed affair, with the manager taking its time to establish the necessary underwriting structures and vehicles to facilitate its market access to reinsurance risks.

An important part of this was the setting up of PIMCO ILS’ Class 3B reinsurance vehicle Newport Re Ltd. which sources told us is understood to have been utilised at the renewal in underwriting contracts.

But equally as important are the fund structures, that house the investor collateral attached to the risks.

Around the mid-year 2019 reinsurance renewals, the PIMCO ILS team set up an investment fund vehicle in the Cayman Islands, registering the PIMCO ILS Series SPC as a mutual fund under the islands laws.

Capital raising activities began immediately, with the first capital raised for the PIMCO ILS Series SPC fund vehicle as an initial $26 million was allocated to a segregated account portfolio named PIMCO ILS Fund SP I within the fund structure.

Now, a second segregated account portfolio has been set up, named PIMCO ILS Fund SP II, to which an offering amount of $98.901 million has been attributed, suggesting a fresh capital raise for this vehicle in time for the January reinsurance renewals.

Now, we’d imagine that the PIMCO ILS team likely has more capital under management than just these two segregated account portfolios in the Cayman Islands ILS fund vehicle, but its full assets under management are currently not available to us.

However, the establishment of another segregated account and raising of fresh investor capital for it shows that the PIMCO ILS team is ramping up its activities, around the key reinsurance renewal junctures and we’d expect the asset manager to continue growing its ILS interests over the course of 2020.

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