Aspen Capital Markets fee income rises 10% in first-quarter

Having reached $1.7 billion in assets under management at the beginning of this year, Aspen Capital Markets, the third-party and alternative reinsurance capital management unit of global re/insurer Aspen, earned 10% more in fee income through the first-quarter of 2024.

The Aspen Capital Markets team successfully lifted its assets under management deployed to collateralized reinsurance opportunities for insurance-linked investors by roughly 31% to $1.7bn over the course of 2023.

With more assets under management, the fee income is always expected to increase and in the firm’s Q1 results statement, Aspen reveals a 10% uplift year-on-year.

For the first-quarter of 2024, Aspen Capital Markets earned $34 million in fee income for its work managing assets for third-party investors, up from $31 million earned in Q1 a year earlier.

For full-year 2023, the Aspen Capital Markets fee income earned rose to $136 million.

As this year progresses, it will be interesting to see whether the recent launch of Aspen’s casualty risk focused Pando Re reinsurance sidecar is reflected in the fee information the company discloses.

As a reminder, Aspen partnered with asset manager PIMCO to launch Pando Re Ltd., a Bermuda-based, casualty focused collateralised re/insurer that act as a reinsurance sidecar for the company.

That venture is being managed under Aspen Capital Markets, so we expect at some stage to see the benefits of the structure flowing to that units bottom-line.

It’s also notable that Aspen is using third-party capital across its business, as evidenced by its recent sponsorship of another catastrophe bond, as the company secured $300 million of multi-peril retrocessional reinsurance from an upsized Kendall Re Ltd. (Series 2024-1) transaction.

Aspen has fully-embraced the capital markets, both for protection and efficient capital, as well as for income through management of assets for third-party investors.

With a differentiation in its offering, thanks to a casualty risk focus as well as other more typical insurance-linked security (ILS) lines, Aspenis demonstrating how a traditional re/insurer can leverage the capital markets across its business.

Aspen Capital Markets is just one of the dedicated insurance-linked securities (ILS) fund managers, and reinsurers offering ILS-style investment opportunities, listed in our Insurance-Linked Securities Investment Managers & Funds Directory.