European bank, insurer team up to create new financial company, reinsurer

In a European marriage between banking and insurance, NATIXIS, an investments and projects bank, has partnered with the White Mountains Insurance Group, Ltd., to create Pentelia Capital Management (PCM), an asset management company based in Bermuda.In addition, the two companies have closed PCMs first fund, Pentelia Limited. Pentelia Limited is a highly innovative alternative investment fund designed to participate in a broad array of rapidly growing insurance risk securitization markets, the founding companies of PCM said in a joint release. The fund will invest in a diversified portfolio of life and non-life insurance-linked assets including adverse mortality bonds, weather derivatives, terrorism insurance, life settlements, cat bonds and property catastrophe reinsurance.The fund has created a new Bermuda reinsurance company, Pentelia Re, in order to be able to offer direct reinsurance coverage on a collateralized basis if desired. The fund intends to invest in a number of remote probability insurance events and to deliver a consistent return with little to no correlation with financial markets, the founding companies announced.PCM, based in Hamilton, Bermuda, specializes in the underwriting and management of insurance-linked assets and investments and has specific expertise in each of the asset classes mentioned above.Through its subsidiary IXIS Corporate & Investment Bank (IXIS CIB), NATIXIS is active in insurance risk asset classes.IXIS CIB has been a significant factor in the creation and execution of a number of insurance risk securitizations and climate-related transactions on behalf of insurance and industrial clients, and has distinguished itself by participating in the first securitization of an auto insurance portfolio (the SPARC transaction) and the first securitization of a pandemic risk (the OSIRIS transaction), the companies said in a statement. NATIXIS is the jointly held bank of Caisse dEpargne and Banque Populaire. It is active in corporate and investment banking, asset management, private equity and private banking, financial services and receivables management.