Conning, a provider of asset management services for the insurance industry, and Ramius Alternative Solutions LLC (RASL), which develops and manages customised alternative investment portfolios, have entered into a strategic alliance.
The two firms are jointly developing a variety of alternative investment strategies to meet the specific needs of insurance companies.
Conning and RASL believe that certain strategies traditionally employed by hedge funds may enhance the risk-adjusted returns and diversification of institutional portfolios. Many insurers, however, have avoided direct investments in hedge funds due to concerns about high capital charges and high fees, as well as the lack of transparency and liquidity.
Conning and RASL are developing tailored strategies for insurers that use a variety of liquid instruments created in recent years - including exchange-traded funds and total return swaps - that are designed to produce returns that have low correlations to existing client portfolios. This approach provides exposure to sources of return traditionally available only to investors in hedge funds but with significantly lower fees and capital charges as well as greater transparency and liquidity.
“We are highly focused on identifying opportunities for our insurance company clients in non-traditional or alternative asset classes while developing customised solutions that address their unique constraints. We believe the investment strategies we are developing with RASL are truly innovative and will be of considerable value to insurers,” says Woody Bradford (pictured), president and chief executive officer of Conning.
The two firms plan to leverage Conning’s expertise in insurance asset management and strategic asset allocation with RASL’s experience in alternative asset strategies. Client strategies will be overseen by an investment committee consisting of senior professionals from both firms.
“Stuart and I are extremely excited about the opportunity to combine RASL’s expertise in developing customised alternative investment solutions with Conning’s deep understanding of the objectives and constraints of insurance company portfolios,” says Vikas Kapoor who, along with Stuart Davies, are managing directors and co-heads of RASL.