Juniperus Capital’s Investment Strategy
The Manager’s investment strategy is to commit at least 70% of capital through traditional reinsurance contracts on a collateralized basis. Other transaction types1 will be considered to enhance the risk/return profile.
The benefits of investing through traditional reinsurance include:
- Access to a US$250+ billion market versus US$11 billion for Cat Bonds
- Ability to use additional perils such as tornado hail, brushfire, aviation, etc.
- Provides the ability to diversify geographically and through time using non-peak perils and non-first event triggers
- Thorough vetting of “expected loss” calculation using CAT modeling input files and reinsurance submission data
- Terms are negotiable, providing more opportunities to customize exposures
- Pricing is influenced directly through negotiation of transactions
These benefits enable the Manager to build portfolios with an attractive risk/reward profile (Cumulative Distribution Function).
- Juniperus 1 is made up of “low attaching” transactions with a high expected return profile but with some volatility of actual returns
- For investors seeking exposure to “high attaching” transactions in the future customized portfolios can be created with a lower expected return but with low volatility of actual returns
1Cat Bonds, Sidecars, ILWs, etc