
Rising interest rates, inflation, and heightened volatility across other asset classes has again brought increased attention to insurance-linked securities (ILS) as an attractive proposition, according to Lorenzo Volpi, Managing Partner at Leadenhall Capital Partners.We spoke with Volpi of specialist ILS and reinsurance investment manager, Leadenhall, a gold sponsor of the upcoming Artemis ILS NYC conference, held in New York City on April 22nd, as part of a series of showcase sponsor video interviews for the event.As well as providing an update on investor trends in the ILS sector on the back of a record year for catastrophe bond issuance, Another topic touched on during the interview, , was investor demand for ILS as the marketplace moves through 2022, and specifically whether appetite will increase with higher return potential.“We have to compare it (ILS) again probably to the past to put the asset class into context, and also on an asset value basis, how attractive ILS is given what else is available out there,” said Volpi.
“In 17 and 18, after those events we saw a lot of investors coming back into the space or actually coming for the first time into the space, and they seemed to have a preference for higher risk, higher return yielding strategies,” he continued. “In reality, at Leadenhall we constantly monitor our capacity across our funds and we have multiple funds that we can offer, and we tend to try to grow our assets in parallel across all different strategies.So, we are not pushing one product versus the other.Instead, we are going to different types of investors which might just have different appetites and saying okay, are you prepared to take more tail risk? Or how does the asset class fit within your portfolio allocation?” said Volpi.
Ultimately, the ability for Leadenhall to be flexible means that it can tailor its different types of strategies dependent on investor needs.“I cannot deny that a quiet first quarter and more clarity about COVID as well, when I think about our life business, really helped to get more traction.But the macro environment, as we all know, is extremely favorable,” explained Volpi.
Adding that, “We have interest rates rising and we actually benefit from it as an asset class, we have inflation, and more volatility across other asset classes.So, again, all these factors are bringing attention to ILS again, as a very attractive proposition.“I’m bullish by nature, so I hope it is the case.
So far, touch wood, as a firm we’ve done extremely well.” Hear more on investor trends in insurance-linked securities at .For details and to register for the conference, visit the event website: .The full video interview is embedded below and can also be .
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Publisher: Artemis