Reinsurance News

Peak Re targets enhanced ILS capabilities with Lutece acquisition

8th April 2020 - Author: Luke Gallin

Hong Kong domiciled reinsurer Peak Re has strengthened its insurance-linked securities (ILS) capabilities with the acquisition of Bermuda-based ILS asset manager, Lutece Holdings Ltd. and its subsidiary Lutece Investment Management Ltd.

Peak Re logoPeak Re has entered into definitive agreements to acquire 100% of the capital of Lutece Holdings and its subsidiary, with the deal remaining subject to regulatory procedures and expected to close in the coming weeks.

Founded in 2017 by Erik Manning and Angus Ayliffe, Lutece launched with a significant amount of committed capital before being acquired by Latin American investment bank BTG Pactual in 2018.

The ILS manager is known in the market for operating a targeted retrocession strategy, but Peak Re says that going forward, Lutece will provide Peak Re with a platform for growth into other parts of the ILS market.

Following the transaction, Lutece Investment Management will be renamed Peak Capital and will become a fully owned subsidiary of Peak Re.

Franz Josef Hahn, Peak Re’s Chief Executive Officer (CEO), commented: “The acquisition of Lutece carries Peak Re forward in its aspirations in ILS by bringing Lutece’s expertise in house. This will definitely be accretive to our capabilities in capital and third party capital management.

“We see opportunities from growing Asian risk exposures – Lutece’s professionals with ILS and structuring expertise, combined with Peak Re’s strong underwriting and operating franchise, will create new avenues for us to innovate for both customers and investors, working towards our ambition of narrowing the protection gap in Asia.”

In late 2018, Peak Re announced the launch of Lion Rock Re, the first Asian sidecar. The reinsurer renewed and upsized the vehicle in 2019 and with the addition of Lutece, Peak Re hopes to further enhance its capabilities in the ILS sector.

Lutece CEO, Erik Manning, commented: “We are delighted to become a part of Peak Re and look forward to bringing our assets and areas of expertise to help strengthen Peak Re’s platform. Peak Re’s analytical-underwriting model is very much in keeping with the culture of Lutece, and with that foundation we are looking forward to helping to expand Peak Re’s ILS footprint.”

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