27 September 2018Analysis

University of California captive assets almost reach $1bn

The University of California's (UC) investment assets under management - including its captive insurers Fiat Lux and UC Health RRG - grew substantially in the fiscal year ending June 30, 2018, with the captive assets reaching almost $1 billion.

UC's total investment assets under management had grown to $118.7 billion as of June 30, 2018, an $8.9 billion increase year-on-year.

The assets are spread across six financial products, which includes its captive insurance operations. The endowment ended the fiscal year at $12.3 billion, the pension at $66.8 billion, working capital at $14.4 billion (total return at $9.3 billion and short term at $5.1 billion), the retirement savings program at $24.3 billion, and captive insurance at $0.9 billion.

“Since I arrived at UC, we have taken a conservative and defensive risk positioning while seeking a wider range of investment opportunities,” said UC chief investment officer Jagdeep Singh Bachher. “The team and I have focused on deepening our 100 active partner relationships with every facet of the university and beyond. A culture of collaboration is our ultimate competitive advantage.”

Formed in 2012, Fiat Lux is the single parent captive for the University of California system, which consists of 10 universities, five medical centres, three national laboratories, 280,000 employees and writes over 25 lines of coverage.

US Health RRG is a separate reciprocal risk retention group that has been formed, providing professional liability to physicians at its five medical centres.

UC intends to form a further three captives, which are currently pending.