Tangency Capital adds $400m, growing assets under management to $1.8bn

Quota share reinsurance focused investment manager Tangency Capital Ltd. has had continued success in raising assets through the first-half and mid-year renewal season, adding $400 million in assets to reach now $1.8 billion in ILS AUM.

The company counted $1.4 billion in assets under management as of the beginning of the year, but capital raising from both existing and new investors has helped to provide this growth for the firm.

Tangency Capital Ltd. is an insurance-linked securities (ILS) investment fund manager with a strategy focused on allocating capital to quota share reinsurance business, seeing this as an aligned way to access the risk premium returns of reinsurance business from strong industry partners.

The company grew in asset terms by roughly 130% in 2023, having counted $600 million in AUM at the end of 2022 and grown to $1.4 billion by January 2024.

Growth continued this year, lifting Tangency Capital’s ILS assets under management by a further almost 30% to $1.8 billion by July 2024.

Helping to drive the growth will be the strong returns generated in 2023. As we reported, Tangency Capital’s strategies delivered anywhere from 20% to as much as 40% to investors last year.

Dominik Hagedorn, COO of Tangency Capital Ltd., spoke with Artemis to discuss the continued capital raising success that the ILS manager has had.

Hagedorn explained, “Tangency Capital added approximately $400m in assets through mid-year 2024, which will take firm AUM above $1.8bn.”

Adding that, “Inflows came from a variety of sources, including existing and new clients.”

Hagedorn said that investors are becoming more familiar with the concept of quota share reinsurance strategies and starting to recognise some of the benefits they can provide, as a way to access reinsurance-linked returns.

“A growing number of institutional investors appear to recognize the potential benefits that a diversified portfolio of quota shares can offer, in particular alignment, diversification and capital efficiency,” Hagedorn said.

“In light of an active hurricane season forecast, some clients may have preferred this diversified approach over other US-centric strategies with higher single event drawdown risk.”

He further explained that, “Bespoke quota shares can be structured across the risk spectrum, across opportunistic, mezzanine and senior only positions.”

This is a segment of reinsurance investing where manager’s can seek to generate alpha for their investors given the negotiation of quota share arrangements and terms is important and selecting which partners to transact with also critical to performance.

Tangency Capital is listed in our directory of insurance-linked securities (ILS) fund managers.

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