Sector developments and company hires

Ex-employees resurrect Highland
A trio of former senior Highland Capital Management portfolio managers have resurrected the firm under a new moniker, Highland ERA Management. Patrick Daugherty – who was partner, senior CLO portfolio manager and head of distressed/special situations at Highland – is partnering with ex-Highland team members Kevin Rourke and Niles Chura in the venture.

Through a sub-advisory agreement with Glacier Lake Capital Advisors, Daugherty will serve as ceo and cio, Rourke will serve as head of research and senior portfolio manager, and Chura will serve as head of special situations and senior portfolio manager. The three founders bring more than 90 years of experience in credit analysis, trading, restructuring and portfolio construction through multiple credit cycles. They have worked together in managing the assets of over 20 CLOs, hedge funds, private equity funds, RICs and retail funds totaling over US$28bn.

Highland ERA Management was transferred to Daugherty at the beginning of April, pursuant to a bankruptcy court ordered settlement agreement between Daugherty and Highland, which resulted in Daugherty being awarded an ownership interest in the Highland platform, complete ownership of two Highland affiliates and a lump sum payment. Headquartered in Dallas, the firm’s investment expertise includes bank loans, high yield bonds, structured credit, claims trading, post-emergence securities, stressed/distressed and special situations.

Glacier Lake Capital Advisors is an alternative investment advisor that was founded by Daugherty and Rourke in 2015. The firm provides sub-advisory and consulting services.

First-of-its-kind ILS prints
Swiss Re has secured US$1.15bn in alternative capital primarily from JPMorgan through an innovative hybrid transaction. The multi-year stop-loss transaction is the first of its type to combine both bank financing and ILS, and is set to cover the underwriting risks across the Swiss Re Group. The deal will support Swiss Re’s future growth opportunities in the reinsurance market by protecting the firm from large underwriting losses between 2022 and 2026, and is expected to benefit the firm’s ratings and regulatory capital requirements.

The transaction makes use of the new segregated account of the existing Matterhorn Re special purpose insurer vehicle. The proceeds of the fully collateralised transaction will be held in EBRD-issued notes, which have stable ratings of Aaa/AAA/AAA from Moody’s, S&P and Fitch respectively. US$1bn of the total financing has been provided by JPMorgan, with the remaining US$150m of investment secured from other institutional investors.