Going forward, Lutece is expected to give Peak Re a platform to grow into other areas of the ILS market

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Peak Re to acquire ILS asset manager Lutece. (Credit: Tumisu from Pixabay)

Hong Kong-based reinsurance firm Peak Reinsurance (Peak Re) has agreed to acquire 100% of the capital of Lutece and its subsidiary Lutece Investment Management for an undisclosed price.

Founded in 2017, Lutece is an insurance-linked securities (ILS) asset manager based in Bermuda. Regulated by the Bermuda Monetary Authority, the company is engaged in yielding attractive returns based on the risk/return appetite of its investor base within the insurance-linked investments sector.

According to Peak Re, the company is known currently in the ILS market for operating a very specific and targeted retro strategy.

Going forward, Lutece is expected to give Peak Re a platform to grow into other areas of the ILS market. On the other hand, Lutece Investment Management will become Peak Re’s fully owned subsidiary and will operate as Peak Capital.

Lutece CEO Erik Manning said: “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.”

The acquisition of the Bermuda-based firm follows Peak Re’s upsizing of Lion Rock Re, claimed to be the first reinsurance sidecar transaction in Asia. The Hong Kong-based reinsurer expects to boost its capabilities and expand its ILS product suite through the addition of Lutece.

Peak RE CEO comments on the acquisition of Lutece

Peak RE CEO Franz Josef Hahn said: “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.

Subject to receipt of regulatory approvals, the transaction is likely to be closed in the coming weeks.