Swiss Re Insurance-Linked Fund Management

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Schroders ILS assets rise to $4bn by end of Q1 2021


Global investment manager Schroders has experienced strong demand for its insurance-linked securities (ILS) fund strategies through the last year or so, growing its ILS assets under management by around one-third to approximately $4 billion by the end of Q1 2021.

Schroders logoThe investment manager has seemingly been able to capitalise on growing investor appetite for private assets that are relatively uncorrelated to broader financial markets.

As we reported earlier today, Schroders has now rebranded its private assets group of investment strategies under the new name of Schroders Capital.

This includes the investment managers’ investing activities in the insurance-linked securities (ILS), private collateralized reinsurance and catastrophe bond space.

Schroders has been in the ILS market since 2013 when it acquired 30% of specialist Swiss ILS, catastrophe bond and reinsurance investment manager Secquaero Advisors Limited.

Schroders then acquired full-ownership of Secquaero Advisors in 2019, since when the asset manager has been expanding its team and strategies on offer.

Adding roughly 33% more in assets over the last roughly one year and a quarter is testament both to Schroders efforts in the ILS and catastrophe bond space, as well as the strong appetite being seen among investors through the past year.

After the volatility in capital markets experienced due to the breakout of the COVID-19 pandemic, investor attention has once again been drawn to insurance-linked securities (ILS), with catastrophe bonds one particular area of focus.

The cat bond has been a particular beneficiary of this demand from investors, due to the often more remote risk layers cat bonds cover, as well as the more transparent and predictable name peril triggers, plus the fact secondary liquidity is available in that marketplace.

Schroders manages one of the largest UCITS cat bond funds in the market and we’d imagine that strategy will have been a beneficiary of some of this elevated investor appetite for reinsurance-linked assets and the asset growth the manager experienced.

Schroders has also been having success raising new capital for its life insurance-linked securities (ILS) fund strategies of later and given the diversification opportunity that offers some investors it’s likely this too could have benefited from part of the asset growth seen.

It’s impressive growth for the manager and is a clear demonstration of the demand flowing from Schroders large, global investor-base to its dedicated ILS management team.

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