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The Convergence2023 conference held in Bermuda today heard from managers of insurance-linked security (ILS) that the ILS market remains smaller than what is desired. They also explained the need to continue to work on making it more scalable to meet the requirements of large investors.
Panellists in a discussion on alpha versus Beta and the differences between ILS fund managers’ strategies agreed that some investors may find the ILS market too small, making it difficult or impossible to secure allocations.
Michael Jedraszak, Co-Founder & CIO at quota share reinsurance focused investment manager Tangency Capital, said for his strategy there can be a size sweet spot, from the manager perspective.
“There’s a sweet spot, the size of that sweet spot depends on the point in the cycle. You could be a little bigger right now and still get away with that. I also think the returns will be pretty good this year and maybe next year. But in general, we tend to support people who care about capital, who don’t have an abundance of it,” Jedraszak said.
Adding, “That offers them the…