Tangency Capital expands AUM to $3.6bn as ILS sector maintains relative appeal: Jedraszak

Coming off a robust 2025, ILS investment manager Tangency Capital Ltd has expanded its AUM to $3.6 billion. However, while Co-Founder and CIO Michael Jedraszak remains cautious about maintaining the firm’s current growth trajectory amidst softening rates, he forecasts a steady flow of capital into the sector as long as the broader ILS space remains attractive to investors.

The increase in assets under management (AUM) amounts to roughly $800 million in capital growth, due to new commitments raised and appreciation in values, over the second half of 2025, as investors continue to see the aligned quota share model as an attractive allocation.

Tangency Capital has grown at a reasonably sharp pace for a bespoke offering in the ILS sector, having managed $600 million in assets back at the end of 2022, which rose to $1.4 billion by January 2024, then rose to a further $1.8 billion in the middle 2024, which then grew to a further $2.3 billion by January 2025, and then reached an impressive $2.8 billion by August last year.

Now, with an enlarged $3.6 billion of capital to deploy into quota share reinsurance investments in 2026, Michael Jedraszak from Tangency Capital spoke with Artemis to provide his outlook for the year.

Reflecting on the firm’s performance in 2025, Jedraszak said: “It’s been a good year for us. The funds performed well, despite the wildfire loss in January. Across our funds, we expanded our investor list and the number of reinsurers that we work with.

“Our AUM now stands at $3.6 billion. So, we’ve grown by over a billion year on year, which we consider a great outcome. As it relates to 2026 growth, it’s too early to tell, but alignment, diversification and capital efficiency can make a for a compelling investment case.”

We also asked Jedraszak to explain how Tangency approached the key January 1^st 2026 renewals.

“We partner with insurers and reinsurers, and one of the key benefits of our capacity is that it gives them greater negotiating power by augmenting capacity they already have. We’re deliberate about who we partner with. We look for partners who know how to use this capacity effectively to generate the best possible outcomes at any point in the cycle for themselves and for our investors, rather than simply distributing investor capacity broadly across the market,” he explained.

When asked how Tangency feels about rate adequacy for 2026, Jedraszak said that Tangency still believes that pricing remains above long-term average levels.

“The increase in attachment levels seen three years ago has had a meaningful impact in reducing losses across the reinsurance industry, even though pricing has since come down. Taken together, these factors suggest that pricing is still above average” the CIO further elaborated.

“That said, you have to accept that after several years of strong returns, rates will eventually normalise, particularly when broader market conditions are easing and we are moving towards a lower interest rates environment.”

Given the significant tightening in the catastrophe bond and collateralized excess-of-loss market, we asked Jedraszak how he feels the return opportunity compares in quota shares now, and whether he believes that quota shares are more insulated from the softening market effects.

“We trade in the same underlying business, so we are not immune to the rate decreases occurring across the broader insurance and reinsurance markets. However, within our quota share products, we have structural levers we can adjust to help mitigate the impact of rate reductions on investors,” the CIO said.

Asked about his and Tangency Capital’s ambitions for 2026, Jedraszak stated: “We expect the relative appeal of the ILS asset class as a whole to continue and our products have particular attributes that make them hopefully stand out amongst other investment options. Therefore, we hope that some of that continued appeal will flow to us.

Jedraszak also elaborated on the significance of fostering long-term relationships within Tangency’s field of specialism.

“I think they’re very important. A key part of our value proposition is providing stable, long-term capital which helps to open doors to investment opportunities. We are long-term investors and remain committed as long as return hurdles are met. Given the diversified nature of our investor base, we also help shield cedents from changes in underlying individual investor appetite over time given our access to different investors from different geographies with varied return expectations.

“It’s also critical to have a strong understanding of the market and the needs of the people we work with, and to ensure that this cooperation results in outcomes that investors find attractive. When this is paired with thoughtful structural elements in a transaction—such as features that lead to minimal capital trapping over time—the product becomes increasingly efficient and beneficial to both buyers and investors.”

Tangency Capital is just one of the insurance-linked securities (ILS) fund managers listed in our directory.

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