“Alternative capital” from hedge funds, pension funds and other yield seeking institutional investors is becoming a larger piece of the reinsurance marketplace, notes a recent study from the U.S. Treasury Department. One report observes that over half of the capital supporting alternative reinsurance originates from “pension funds, endowments and sovereign wealth funds, generally through specialized insurance-linked investment funds.” In the space, alternative reinsurance solutions instruments have primarily been geared toward property catastrophe risks, which offer a relatively short time horizon to maturity, allowing investors to participate in contracts of a few years or less and evaluate returns soon after contract…
Pension Funds Growing Component of Re-Insurance Market
Mark Melin
Mark Melin is an alternative investment practitioner whose specialty is recognizing the impact of beta market environment on a technical trading strategy. A portfolio and industry consultant, wrote or edited three books including High Performance Managed Futures (Wiley 2010) and The Chicago Board of Trade’s Handbook of Futures and Options (McGraw-Hill 2008) and taught a course at Northwestern University's executive education program.