A half billion dollar coup by a Bermuda-based firm will lead to more jobs, one of the prime movers said yesterday.

ILS Investment Management — an arm of Bermuda-based Armour Group Holdings — acted as sub-adviser in the successful bid by multi-national Credit Suisse to raise $576 million to close the first insurance-linked securities (ILS) fund focused on property and casualty run-off portfolios.

John Williams, president of Armour Group and, with Brad Huntingdon, principals of ILS Investment Management, said: “It will definitely mean more jobs — people are being hired now.”

He added that the Island traditionally specialised in catastrophe, rather than non-catastrophe, business.

Mr Williams said: “This diversifies Bermuda’s fund management — and it is an endorsement of the level of expertise in Bermuda.”

He added the move meant that the three largest run-off specialists were now based in Bermuda.

The deal was set up by Credit Suisse Asset Management’s (CSAM) ILS strategies team and ILS Investment Management and created the first ILS fund, ILS Property & Casualty Fund, aimed at property and casualty run-off portfolios.

The cash was committed by a diverse mix of institutional investors, including public and corporate pension funds, endowments, insurers, fund of funds, asset managers, foundations and family offices — which the organisers said was testament to its appeal to a broad cross-section of investors.

The Property & Casualty Fund, whose investment management will be carried out by ILS Investment Management, offers investors access to the returns of discontinued books of property and casualty business, lines that are in run-off and that have outstanding claims liabilities.

The organisers said: “The size of the opportunity could eventually be very large as there are many such books of business in run-off, however the quality levels associated with them will differ widely, making the expertise of those selecting and managing it vital.”

They added: “ILS Investment Management and CSAM have taken the lead in structuring a fund that enables investors to take a broad spectrum of insurance risk, risks that have perhaps not been as readily accessible to ILS investors ever before.

“The launch of the P&C Fund brings another strategy to the market which will allow ILS investors to access the returns of a different type or re/insurance business.

“At the moment, this is a unique proposition which may in the future find others seeking to copy.

“However, having the expertise in managing run-off business is key for a strategy like this fund as it is an entirely different proposition to managing a portfolio of one-year reinsurance contracts as is more typical in ILS.”