White Mountains Insurance Group made good on its promise to allocate up to $50 million of capital into ILS funds under the management of Elementum Advisors, LLC, the insurance and reinsurance linked asset manager in which it acquired a 30% stake in 2019.
White Mountains acquired a stake in ILS fund manager Elementum Advisors in May 2019, confirming news that we originally broke in April of last year.
The company paid $55 million for a 30% stake in Elementum, which valued the ILS fund manager at roughly $183 million.
Alongside the management company stake, White Mountains committed to boost Elementum’s assets under management as well by investing in its ILS and reinsurance linked funds, a way to demonstrate its alignment with the ILS manager and its other investors.
Elementum Advisors is one of the leading manager’s of insurance-linked securities (ILS), catastrophe bonds, industry loss warranties (ILW’s) and collateralized reinsurance having first launched back in 2009.
The company had around $4.3 billion of ILS and reinsurance assets under its management across a range of funds for its investors as of Q4 2019, as detailed in our ILS investment manager directory.
Part-owner White Mountains is now a growing investor, having taken its allocation to the Elementum ILS funds to $50 million for the 2020 underwriting year.
The value of those first allocations reached $41.2 million at the end of 2019, but White Mountains sought to increase it to the originally promised $50 million with a fresh allocation to a new Elementum ILS fund in time for the January 2020 renewals.
White Mountains made a $10 million commitment to a fourth Elementum ILS fund for 2020, lifting its investments in the ILS and reinsurance linked strategies under Elementum’s management to the $50 million.
White Mountains also reported the carrying value of its ownership stake in Elementum at $55.1 million, as of the end of 2019.
Continuing its allocations to the Elementum ILS funds better aligns White Mountains with Elementum’s third-party investor base.
With a limited partnership stake and an investment in the Elementum ILS funds, it shows White Mountains as ready to share in both the profits and losses coming from catastrophe bond or collateralized reinsurance investments across the managers’ portfolios.