Leadenhall hits $3bn in assets landmark
Funds managed by Leadenhall Capital Partners have enjoyed steady growth in 2016 and it is now managing more than $3.1 billion of assets, partly thanks to the contribution of its new catastrophe bond-focused Leadenhall UCITS ILS Fund, which it launched at the end of 2015, but also thanks to the growth of its other life and non-life fund, as Luca Albertini, chief executive, Leadenhall Capital Partners told Monte Carlo Today.
He said the total assets Leadenhall—an independently managed joint venture with re/insurance firm MS Amlin—is now managing have reached $3.18 billion, a big increase on the $2.41 billion it started the year with. “That is despite the fact we have a billion in sterling, which has depreciated by 10 percent,” Albertini said.
He said the portfolio is split roughly 50:50 between life and non-life products and part of the growth has been thanks to the success of the new UCITS ILS Fund, despite the fact that it has not been overtly marketed.
This fund is now approaching $160 million, almost double its size when launched. “It has grown on the back of reverse inquiries,” said Albertini.
He added that some investors are attracted by the idea of first entering this asset class by investing in a more liquid and transparent product while many funds have a certain allocation of assets that can be invested only in UCITS funds.
But he also stressed that he believes the ILS product should be limited to skilled institutional investors or via skilled advisors—thus the distribution of this fund is tightly managed.
Leadenhall has a number of open-ended ILS funds, including the non-life focused Leadenhall Value Insurance Linked Investments Fund, the non-life and life Leadenhall Diversified Insurance Linked Investments Fund and the pure life ILS investment fund Leadenhall Life Insurance Linked Investments Fund.
Albertini said that despite the current growth his funds are enjoying, the market will need to diversify and eventually find new risks.
“We need the total size of the pie to grow,” he said. “We need to do everything we can to grow new markets and push through ILS legislation in markets such as London, which would help. It is difficult to come up with new ideas when the market is so soft but new companies will come to the market when the time is right.”
He stressed that the demand side of the business remains very bullish. Investors are drawn by the uncorrelated nature of the risks and the healthy returns in comparison to other investors in this environment.
He believes that even if the wider investment picture were to improve, these investors will not now abandon the market. “It was the wider investment environment that pushed them to make an investment. But now they have done the hard work, they will stay,” Albertini said.
