Hong Kong reinsurer Peak Re to acquire ILS asset manager Lutece

Peak Re acquisition of Lutece : Peak Reinsurance (Peak Re), a Hong Kong-based reinsurance company, has signed a deal to acquire Bermuda-based insurance-linked securities (ILS) asset manager Lutece and its subsidiary Lutece Investment Management.

Financial terms of the deal were not disclosed by the parties.

Established about three years ago, Lutece is focused on generating attractive returns using the risk/return appetite of its investor portfolio within the insurance-linked investments sector.

Regulated by the Bermuda Monetary Authority, Lutece is known in the insurance-linked securities market for employing a highly precise and targeted retro strategy, as per Peak Re.

Moving ahead, Lutece will provide a base for Peak Re to expand into other segments of the insurance-linked securities market. The Hong Kong reinsurer plans to make Lutece Investment Management as a fully owned subsidiary, which will do business as Peak Capital.

Commenting on Peak Re acquisition of Lutece, Erik Manning – CEO of Lutece, 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.”

Peak Re acquisition of Lutece comes in the wake of the former’s upsizing of Lion Rock Re, which is said to be the first reinsurance sidecar transaction in Asia. The Hong Kong reinsurance company is hoping to ramp up its capabilities and broaden its insurance-linked securities product suite through the acquisition of Lutece.

Franz Josef Hahn, CEO of Peak RE, commenting on Peak Re acquisition of Lutece, 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.

The closing of Peak Re acquisition of Lutece is expected to occur in the coming weeks upon receiving regulatory approvals.