Bermuda’s asset management business could be boosted by the boom in insurance-linked securities (ILS), an expert said yesterday.

Jessel Mendes, a partner at financial services firm Ernst & Young, said: “The interest in insurance-linked securities is certainly helping our local asset management industry.

“As people use Bermuda for insurance-linked securities, they are using Bermuda products and services and Bermuda is getting great exposure.

“My hope is that the momentum in insurance-linked securities helps our traditional hedge fund space.”

Mr Mendes was speaking after he delivered a talk on why the Island is a good home for asset managers at the annual ILS Convergence conference, held at Pier Six this week.

There are 145 listed ILS vehicles registered in Bermuda, with a value of more than $18 billion.

Mr Mendes said that the Island’s asset management sector, was growing alongside the ILS market after the area declined amid competition from other jurisdictions like the Caymans.

He added: “I think we kind of took our eye off the ball — we were losing incorporations because other jurisdictions were garnishing that marketplace.”

But Mr Mendes added: “These funds were still being administered here, although over the years these companies have transited out.”

And he said: “I am so optimistic because things are starting to turn. People want a viable option and Bermuda globally has a great reputation. “We have always been in asset management, but it’s not been pushed as hard as insurance.”

And Mr Mendes pointed out that a number of reinsurance companies had already set up asset management arms of their own, using Island expertise. Island-based funds, as of the second quarter of this year, had a massive $152.5 billion in assets under management, although the amount has fallen from the $180 billion recorded in the same period in 2014, according to Bermuda Monetary Authority statistics.

Mr Mendes said: “If you look at the three pillars, we are seeing a lot of capital coming into Bermuda.

“We are seeing our local reinsurance companies setting up asset management divisions and we are also seeing locally-based asset managers launching funds with reinsurance products.

“What I would like to see is that ILS momentum feed into traditional hedge fund play.”

Earlier, Mr Mendes told the international ILS gathering that Bermuda’s reputation, regulation, stability and financial expertise all combined to make it an attractive home for asset management.

He added: “Physical presence is key to Bermuda’s success — we have a top pool of talent across all levels of the industry.

“We have a terrific reputation for quality globally and our regulator has a lot to do with that. We have a tried and tested jurisdiction that has been doing business for a very long time with political stability.” Michael Dunkley, the Premier, opened the day’s events and said: “Our Government believes it is important to continue to provide you, our global partners with a stable business platform that enables you to succeed and to use your innovation.”

And he added that he wanted to “reinforce the fact that Bermuda is on the upsurge in so many areas.”

Mr Dunkley said: “The economic challenges that have dogged the global markets these past years are showing strong signs of recovery.

“Here in Bermuda we are seeing some very positive economic indicators that have helped spur business confidence and business investment in Bermuda.” The two-day conference, which ended yesterday was hailed a success by organisers, with more than 300 delegates from 15 different countries attending.

Greg Wojciechowski, CEO of the Bermuda Stock Exchange and chairman of the ILS Bermuda organising committee, said, “We always look forward to welcoming our industry colleagues from all over the world back to Bermuda to meet, discuss important trends and to experience first hand the infrastructure, industry critical mass and our innovative spirit all of which combined have resulted in Bermuda becoming an ILS centre of excellence.”

Proceeds from the sponsorship of keynote speaker, Jimmy Spithill are being donated to the Endeavour Programme, a youth community sailing programme directed by The America’s Cup with some of the biggest names in the marine industry taking a leadership role.