LGT’s insurance-linked strategies team has won three large mandates in the first half of 2013 worth USD400m from large European pension funds.
The mandates are structured as separate, regulated funds on LGT’s dedicated ILS platform in Luxembourg, and they focus on private insurance-linked investments, also known as collateralised reinsurance.
The three institutions awarding the mandates include one of the largest Dutch pension fund managers (whose mandate covers non-US risk only), the AXA Winterthur pension fund and the pension plan of a Swiss municipality (both covering worldwide risks).
All of the mandates have a primary allocation to collateralised reinsurance as well as a strategic allocation to insurance-linked securities/cat bonds in order to take advantage of attractive market opportunities and manage liquidity.
The ILS team has grown its asset base by 30 per cent in the first year following LGT’s acquisition of the team from Clariden Leu.
Steven Kaufmann, who is leading the insurance-linked investments allocation at AXA Winterthur Pension Fund, says: “We have followed the ILS space for a long time and have been convinced by the uncorrelated returns in the insurance-linked investments sector, as well as the long track record, transparency, and high quality of the LGT team, especially regarding collateralised reinsurance.”
Michael Stahel, partner and portfolio manager of LGT ILS, says: “We are extremely pleased that AXA Winterthur selected us for its allocation to this exciting asset class, which will help to further diversify their asset base.”