Neuberger Berman to Buy $1B Natural Disaster Risk Manager

By Katherine Chiglinsky, Krista Gmelich and Katia Porzecanski | November 2, 2018

Neuberger Berman Group acquired an asset manager that oversees more than $1 billion with a focus on betting on risks tied to natural catastrophes such as hurricanes and earthquakes.

The closely held investment manager struck the deal with private equity firm Cartesian Capital Group for Cartesian Re and its reinsurer Iris Re, according to a statement issued Thursday that didn’t disclose terms. Those businesses oversee money from investors including pension funds and endowments, and manage insurance-linked strategies that focus on natural catastrophes.

The market for insurance-related securities has been growing as investors such as pension funds and hedge funds seek diversified bets that are less tied to swings in interest rates or stock markets. Cartesian Re’s strategies, linked to industry-loss warranties, differ slightly from catastrophe bonds, offering more liquidity and shorter durations, according to Peter Yu, who is managing partner of the seller, Cartesian Capital Group.

“We don’t have a tremendous number of solutions that have no correlation to traditional markets that are traded,” said David Kupperman, co-head of Neuberger Berman’s alternative-investment management team. The acquisition is an “intriguing complement to the set of solutions we have for institutional clients, working with them to really diversify their portfolios.”

Cartesian Re managing directors Peter DiFiore, Cedric Drui and Charles Mixon will join Neuberger Berman, working in their current roles, according to the statement.

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