The retirement fund's ILS investments neared 1% of its overall portfolio by the end of the year
The Healthcare of Ontario Pension Plan (HOOPP), one of Canada’s largest institutional retirement fund, reported that it grew its allocation to insurance-linked securities (ILS) investments in 2022 by 35%.
This was at a faster rate than the previous year when it added 31% to the ILS portfolio, with the asset class nearing 1% of its overall portfolio by the end of the year.
HOOPP started allocating to insurance-linked securities largely via insurance-linked funds, as well as some direct investments into other reinsurance-related securities, in late 2019. By the end of 2022, its ILS asset allocation had reached C$973 million (approx. US $718.7m), up from C$721 million (approx. US $575m) at the end of 2021.
In early 2020, HOOPP hired Bernard Van der Stichele, an experienced ILS and reinsurance sector executive, as a Portfolio Manager for its Insurance-linked Securities allocation. The fund was seen to be shifting from a focus on equities, targeting a range of alternative asset classes, including insurance-linked securities, to help soften the blow of the market volatility that resulted from the COVID-19 pandemic.
At the end of 2019, HOOPP’s ILS allocation reached around C$260 million, before 2020 saw it build on the ILS investment program, more than doubling it to reach C$549 million at the end of that year (around US$440m at the time).
In 2021, HOOPP continued to steadily grow the ILS strategy, building it to C$721 million (US 575m) by the end of that year, representing growth of just over 31% in Canadian dollars.
With the ILS allocation growing 35% to reach C$973 million in 2022, HOOPP ended the last year with ILS investments nearing a 1% share of its total portfolio size.
