SCOR Investment Partners, the asset management company of the global reinsurance group SCOR, has continued to add new capital to one of its core insurance-linked securities (ILS) fund strategies, the Atropos, which has now exceeded the $1 billion mark in terms of assets under management.
At the same time, SCOR Investment Partners overall insurance-linked securities (ILS) assets under management across the SCOR IP ILS funds and those managed by its London subsidiary Coriolis Capital Limited sit around the $2.4 billion mark.
SCOR’s plans to place ILS at the heart of the global reinsurance business, part of which was to adopt a more coordinated approach to ILS for its clients, offering its traditional reinsurance capacity alongside collateralised capacity from SCOR Investment Partners’ long-standing ILS fund Atropos as well as from Coriolis Capital, the London-based ILS fund manager SCOR acquired last year, is taking shape.
SCOR began to front for the ILS funds this year, with SCOR Global P&C fronting capacity used for ILS over-the-counter transactions on behalf of SCOR Investment Partners strategies, to make it simpler for clients to access their collateralised capacity and easier for the ILS funds to enter into transactions with an increasingly broad range of SCOR clients.
The strategy appears to be working, as the company has been able to increase its AuM at a time when the market has faced significant challenges.
The Atropos ILS fund was originally launched in August 2011 and targets annual absolute returns of between 6% and 8%, while offering monthly liquidity to investors.
Since the start of 2020, the Atropos ILS fund has delivered a performance of +6.29% and has recorded gross inflows of more than US $140 million.
Across SCOR Investment Partners ILS funds, gross inflows now total more than US $200 million, including to the firm’s pure catastrophe bonds strategy, the Atropos Catbond fund.
SCOR Investment Partners targets repeatable, stable returns for investors through its ILS fund strategies, focusing on well-modelled, clearly defined and limited transactions which provide good shock absorption for major catastrophe loss events.
As a result the downside is well-managed and helped to make the SCOR IP ILS funds quite resilient even in major loss years.
Through 2017, 2018 and 2019, SCOR’s Atropos ILS fund delivered a net performance of +5.78%, compared to the -7.34% performance of the Eurekahedge ILS Advisors, a benchmark of ILS fund performance.
Olivier Nolland, Global Head of Client Solutions and member of the SCOR Investment Partners management board, commented on the news, “We are proud that the assets under management for the Atropos fund, which was the first strategy we offered to third-party investors, have exceeded the USD 1 billion mark. During the current global health and economic crisis, the Atropos fund offers investors a source of diversification and decorrelated returns. This success confirms that our positioning on diversification strategies has been very well received by institutional investors.”
Sidney Rostan, Head of ILS at SCOR Investment Partners, added, “These past few challenging years on the ILS market have enabled investors to compare investment strategies. Our approach – to select contracts with returns we consider appropriate for the risks covered and to construct portfolios with a strong capacity for shock absorption – has demonstrated its strength. This strong resilience indicates the aptness of our approach, which combines risk profile consistency and adjustment to emerging market dynamics.”