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Kramer targets $200mn for marine/specialty ILS

Don Kramer's nascent insurance-linked securities (ILS) fund manager, ILS Capital Management, will be targeting marine business in the January 2014 renewals after hiring former Ariel Re underwriter Brian Gulbransen.

ILS Capital Management vice chairman Tom Libassi said the firm was confident it would hit its $200mn initial fundraising target for its main fund, the 1609 Fund, by September.

The company recently confirmed the appointment of Gulbransen as chief underwriter of specialty reinsurance.

Libassi said institutional investors who were already involved in the ILS sector were keen to gain exposure to new types of risk outside the property catastrophe market.

Marine would likely make up more than half of the 1609 Fund's portfolio, Libassi said, although it also plans to write energy and property cat business with other specialty targets including aviation and aerospace business.

The sector is a minnow when compared against the global reinsurance markets, but this also helps insulate it from the pricing pressures being experienced by an over-capitalised property cat market, Libassi said.

Marine reinsurance rates have generally risen since the sector's extensive losses in 2012 following the Costa Concordia sinking and Hurricane Sandy.

But the long-tail nature of liability business remains a problem for the alternative market because of the difficulty of having collateral tied up for years.

Kramer has been fundraising for ILS Capital Management since mid-2011. During this process he has reunited with many colleagues from Ariel Re, the company he founded in 2005.

However, earlier this year he lost senior underwriter Jerome Faure from the team, who took up a new role at Endurance as CEO of global reinsurance.

Gulbransen will join the firm on 1 July 2013, subject to Bermuda immigration approval, along with another former Ariel Re staffer, William Mulcahy.

Mulcahy was most recently with ILS fund manager Securis and will take on the role of chief actuary at ILS Capital Management.

Commenting on the hires, Kramer said: "Specialty reinsurance was a significant contributor to my previous companies' success, and I believe it will be a key contributor to our portfolio's returns."

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