{"id":501,"date":"2025-03-05T08:00:15","date_gmt":"2025-03-05T09:00:15","guid":{"rendered":"http:\/\/alteredconcept.com\/?p=501"},"modified":"2025-03-28T11:54:33","modified_gmt":"2025-03-28T11:54:33","slug":"mlc-launches-multi-manager-ils-fund-its-first-dedicated-reinsurance-strategy","status":"publish","type":"post","link":"http:\/\/alteredconcept.com\/index.php\/2025\/03\/05\/mlc-launches-multi-manager-ils-fund-its-first-dedicated-reinsurance-strategy\/","title":{"rendered":"MLC launches multi-manager ILS fund, its first dedicated reinsurance strategy"},"content":{"rendered":"

This content is copyright to www.artemis.bm<\/a> and should not appear anywhere else, or an infringement has occurred.<\/p>\n

MLC Asset Management, an Australian investment arm of Insignia Financial Group, has launched a new multi-manager insurance-linked securities (ILS) fund offering, the MLC Reinsurance Investment Fund, which marks the firm\u2019s first dedicated ILS fund strategy that is being offered to institutional investors.
\n<\/span>
\n\"gareth-abley-mlc-asset-management\"MLC Asset Management has been an allocator to insurance-linked securities (ILS), both catastrophe bonds and private reinsurance strategies since 2007.<\/p>\n

In this time the investment manager has allocated to ILS products from its range of multi-asset and alternative funds, with reinsurance-linked assets making up a component of many of these.<\/p>\n

The driver has been adding diversification and a source of relatively uncorrelated returns, which has worked well for MLC and its clients over the years.<\/p>\n

Now 17 years into investing in ILS and reinsurance, MLC\u2019s track-record has been impressive with a 8.3% annual return (in AUD) over that period. The strategy has also outperformed cash for 16 out of those 17 years.<\/p>\n

As a result, MLC has around AU $3 billion allocated to the ILS asset class across its strategies and has now opened up this track-record to other Australian institutional investors looking for a locally managed, dedicated ILS fund strategy.<\/p>\n

Launched for 2025, the MLC Reinsurance Investment Fund has been seeded with approximately AU $250 million in capital by Australian institutional investors.<\/p>\n

Taking a fund of funds approach, this multi-manager portfolio is the first time MLC has packaged its alternatives expertise for the external investor market in Australia and the company sees it as an important milestone in the growth of the alternatives segment of its business.<\/p>\n

Artemis spoke with Gareth Abley, Co-Head of Alternatives at MLC Asset Management, to learn more about the first dedicated ILS fund launch by the company.<\/p>\n

\u201cWe\u2019re out essentially offering that multi-manager ILS capability we\u2019ve developed in-house to other people who may find it beneficial to piggyback off what we\u2019ve done and what we\u2019ve learnt over the last 17 years,\u201d Abley explained.<\/p>\n

Discussing the broader ILS strategy and how that\u2019s developed at MLC, Abley said, \u201cIt\u2019s been a remote-risk oriented strategy since launch and has generally done pretty well, so we\u2019ve made money every year in the last 17 years.<\/p>\n

\u201cIt\u2019s been a strategic allocation and the track record has been good, which has meant that our stakeholders have been comfortable sizing up when it makes sense to size up, such as in the last couple of years when spreads have widened. It\u2019s generally been a success story asset class for us.\u201d<\/p>\n

On why now, for the launch of the first dedicated ILS fund for external clients, Abley said that encouragement has come from both clients and internal stakeholders at MLC.<\/p>\n

\u201cThe business encouraged us to see if we can commercialise these capabilities, so we\u2019ve recently created a commingled fund which we\u2019ve seeded with $250 million of external capital from an institutional investor. So we\u2019re now out essentially offering that multi-manager capability.\u201d<\/p>\n

Discussing the MLC Reinsurance Investment Fund strategy, Abley said, \u201cThis specialist reinsurance fund allocates across quota shares, collateralized reinsurance and cat bonds.\u201d<\/p>\n

Abley said there are four separate ILS fund strategies currently being allocated to through the MLC Reinsurance Investment Fund, \u201cWe know that manager dispersion in the asset class can be very wide, even for strategies with ostensibly similar EL profiles. Plus our view is that the nature of remote risk reinsurance is that luck can dominate skill over many time periods. So if an investor wants to capture the risk premium reliably we think multi-manager is the best way to do that.\u201d<\/p>\n

Further explaining that, \u201cIt\u2019s designed to play across the ecosystem, based on where the relative value is most attractive and using different specialist managers, some of whom have more expertise in certain areas.<\/p>\n

\u201cSome are more focused on collateralized reinsurance, some quota shares, some catastrophe bonds, so that\u2019s the way we\u2019ve managed our ILS strategy it for over a decade, having the multi manager approach and playing across public and private instruments.\u201d<\/p>\n

Fund of fund strategies are less common in ILS still, in part because of certain challenges presented by fee structures and the costs of allocating across multiple strategies.<\/p>\n

But Abley feels that with MLC\u2019s scale already in ILS and its long relationships with some of the leading ILS fund managers, it has constructed a compelling offering for institutions.<\/p>\n

\u201cI think that\u2019s part of the value proposition because we\u2019re a very big investor who\u2019s been around the ILS asset class for a long time,\u201d he explained.<\/p>\n

\u201cAs you can imagine, the mandates we\u2019re running with, you know with $3 billion plus aggregate AUM, are pretty big. As well as this scale, we\u2019re a long-term investor in the asset class, and the stability of our capital has strategic value to our counterparties. All this means win-win commercial arrangements with high quality counterparties. So we think the maths for external investors \u2013 in terms of portfolio quality, outsourced multi-manager and look through fees is really attractive.<\/p>\n

\u201cInvestors can get instant diversification, with access to both the public and private segments of ILS, while the multi-manager approach means the fund will generate broad reinsurance returns from a single allocation,\u201d Abley stated.<\/p>\n

MLC launches multi-manager ILS fund, its first dedicated reinsurance strategy<\/a> was published by: www.Artemis.bm<\/a>
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