The $12 billion credit-focused firm Hildene Capital has launched Ludlow Re SPC, Ltd., a Class B(iii) insurance company based in the Cayman Islands that will offer reinsurance to the global insurance market.
The new entity kicks off with the reinsurance of approximately $1 billion of fixed index annuity reserves through a quota share agreement with a U.S.-based life insurance carrier. Ludlow Re received its B(iii) insurance license from the Cayman Islands Monetary Authority in September 2022.
Ludlow Re will optimize Hildene’s asset management capabilities, founders say.
“Since Hildene’s inception in 2008, we have taken a prudent approach to managing the size of scale of our assets and will continue to execute on this approach with Ludlow Re – opportunistically adding to our portfolio only when we believe we can confidently invest in assets that produce attractive returns for our clients,” said Brett Jefferson, founder and co-chief investment officer of Hildene, in a statement.
Perpetual capital has been on the rise at alternative asset management firms. Large public private equity companies have made a push into “perpetual capital” in the past five years through both organic growth and acquisitions. In our analysis of five of the largest publicly traded firms earlier this year, AW Research found perpetual assets accounted for between 29% to over 60% of assets, with insurance units growing rapidly.
“Hildene’s structured credit assets, particularly TruPS CDOs, align well with the duration and liquidity profile of life and annuity insurance liabilities,” added Dushyant Mehra, co-chief investment officer of Hildene, in a press statement. “We believe insurers and asset managers can benefit from a symbiotic relationship — money managers receive access to insurers’ expansive capital base while insurers receive access to sophisticated investment opportunities they may not have otherwise.”