Conning/RASL Alliance Aims at Alternative Investment Strategies for Insurers

The firms have adopted a "unique" approach will provide exposure to sources of return traditionally available only to investors in hedge funds but with significantly lower fees and capital charges as well as greater transparency and liquidity.

Conning, a global provider of asset management services for the insurance industry has entered into a strategic alliance with Ramius Alternative Solutions LLC (RASL), a company that develops and manages alternative investment strategies. The two firms will jointly develop a variety of alternative investment strategies aimed at meeting the specific needs of insurance companies.

The Conning and RASL strategy is based on the theory that certain strategies traditionally employed by hedge funds may enhance the risk-adjusted returns and diversification of institutional portfolios. Insurers have traditionally avoided direct investments due to concerns about high capital charges and high fees, as well as the lack of transparency and liquidity, according to a joint statement from Conning and RASL. However, the two firms are developing what they characterize as a unique approach involving tailored strategies for insurers that utilize a variety of liquid instruments created in recent years -- including exchange-traded funds and total return swaps -- that are designed to produce returns that have low correlations to existing client portfolios. The firms assert that this approach will provide exposure to sources of return traditionally available only to investors in hedge funds but with significantly lower fees and capital charges as well as greater transparency and liquidity.

[For more on Conning's partnership activities, see Conning/Milliman Partnership Boosts Economic Capital Modeling .]

“We are highly focused on identifying opportunities for our insurance company clients in non-traditional or alternative asset classes while developing customized solutions that address their unique constraints," comments Woody Bradford, president and CEO of Conning. "We believe the investment strategies we are developing with RASL are truly innovative and will be of considerable value to insurers."

The alliance will leverage Conning’s expertise in insurance asset management and strategic asset allocation along with RASL’s extensive experience in alternative asset strategies. Client strategies will be overseen by an investment committee consisting of senior professionals from both firms.

Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio