LGT secures Kresge Foundation and Princely Family of Liechtenstein backing for Lumen Re

Fund manager LGT Capital Partners has brought in US-based The Kresge Foundation as an external equity investor in its Bermuda-based rated reinsurance platform Lumen Re.

Structured as a co-investment alongside the Princely Family of Liechtenstein, LGT said the direct equity investment in Lumen Re will allow for “the most efficient allocation to insurance-linked strategies (ILS) for any long-term investor”.

LGT said Lumen Re serves as a cornerstone of its ILS investment activity, both as a dedicated property catastrophe reinsurance carrier, and as a fronter/service provider to the LGT CP ILS fund suite.

As this publication has reported, Lumen Re is one of a handful of rated reinsurers set up by ILS fund managers in recent years.

The reinsurer was established by LGT’s specialist ILS team in 2012 to facilitate the structuring of investments in ILS on behalf of ILS funds and mandates of LGT Capital Partners. In 2017, Lumen Re was upgraded to a fully regulated commercial reinsurance carrier.

Earlier this year, AM Best affirmed Lumen Re’s A (Excellent) financial strength rating.

“After several years with increased catastrophe event activity, the ILS market has undergone a fundamental shift, with improved rates and conditions,” said Adrian Ohmer, investment director and head of diversifying strategies of The Kresge Foundation.

Alongside the co-investors announcement, Lumen Re confirmed the roles of Klaus Sapelza as chief underwriting officer and Mario Spescha as COO at Lumen Re in Bermuda. Both were formerly part of the ILS team at LGT Capital Partners in Switzerland.

“We saw this as an attractive entry point for a long-term ILS allocation through a uniquely-structured investment in Lumen Re with LGT Capital Partners, a firm that we view as a high quality partner,” Ohmer added.

Roberto Paganoni, CEO of LGT Capital Partners, said: “We welcome The Kresge Foundation as a co-investor in Lumen Re and are excited to continue the build-out of Lumen Re’s balance sheet strength by leveraging our experience as a long-term investor in this asset class since 2005.”