Description of Pillar Capital. Pillar Capital Management Limited (the “Advisor”), a Bermuda exempted
company, is an investment manager specializing in catastrophe risk investments for privately offered
pooled investment vehicles.
The Advisor was formed in April 2008 (under a predecessor name) by Benfield Group. The Advisor is
100% owned by Pillar Capital Holdings Limited. Its ultimate principal owners are certain management
persons of the Advisor and Transatlantic Holdings, Inc., a leading international (re)insurance company and
an indirect subsidiary of Berkshire Hathaway, Inc.
Advisory Services Offered. The Advisor provides investment management services regarding
catastrophe risk to its Clients, which are organized as privately offered pooled investment vehicles open
for investment by qualified institutional and high net worth investors. The Advisor currently acts as the
sponsor and investment manager of private investment funds (each a “Fund”, collectively the “Funds”).
Each Fund is referred to as a “Client” or collectively as “Clients”.
Each Fund is open for investment only by qualified institutional or high net worth investors that meet the
suitability requirements set forth in the applicable Fund's subscription documents. The Funds conduct all
trading activity pursuant to the investment strategies described generally below.
Funds may be organized and offered for private investors generally, and under certain circumstances may
be customized for single investors or groups of investors as agreed with the Advisor.
The Funds pursue investment strategies that purchase or sell various types of securities and financial
instruments, the return or performance of which are primarily linked to catastrophic events and other property
insurance risk. Transactions are typically structured as securities in the form of notes, over-the-counter
swaps, or other derivatives contracts. The Advisor expects that its advisory services will be limited to
advice regarding the foregoing investment strategies and instruments, as generally described below,
together "Insurance-Linked Securities".
• Private collateralized reinsurance arrangements sourced in traditional property catastrophe
reinsurance markets, including reinstatement premium protection reinsurance contracts and quota
share contracts;
• Catastrophe bonds (principal-at-risk variable rate notes and other event-linked securities) being
referred to collectively as “Cat Bonds”;
• Industry loss warranties (both indemnity-based and non-indemnity-based) reinsurance or
derivative contracts triggered by industry-wide insurance losses (referred to collectively as
“ILWs”);
• Shares of special purpose reinsurers and other securities or instruments the return on which is
linked to the occurrence of a predetermined event.
The primary differences between the Funds relate to portfolio diversification, the nature and terms of the
specific portfolio investments, the Advisor's fees, liquidity, and the investors' redemption or withdrawal
rights. A Fund is normally organized into one or more classes of shares or interests, each with its own
terms and conditions. For a complete description of a Fund's investment objectives and strategies, as
well as a description
of the material terms of an investment in a Fund (including the risks of an investment
and associated conflicts of interest), please refer to the relevant Fund's Confidential Private Placement
Memorandum (the “Memorandum”).
The Funds themselves do not carry out insurance or reinsurance business. To facilitate its Clients’ access
to the traditional reinsurance market, Pillar Capital organized JC Re Ltd. (“JC Re”), a Bermuda exempted
company limited by shares which is licensed as a Class 3 insurer under the Bermuda Insurance Act 1978
and is also registered as a segregated accounts company pursuant to the provisions of the Bermuda
Segregated Accounts Companies Act, 2000. Pillar Capital is the manager of JC Re. The Advisor currently
expects that all such reinsurance-related derivative transactions for its Clients generally will be entered into
with JC Re as opposed to with a third party transformer. The primary purpose of using JC Re is to eliminate
the “mark-up” that would otherwise be charged to Clients by a third party transformer on the derivative
transaction.
Pillar Capital generally invests the collateral and unearned premiums of JC Re and the uninvested Client
assets in cash, money market funds, and financial instruments rated "AA-" or better by Standard and Poor's
or equivalent.
Tailored Services. An offering to invest in a Fund can be made only by means of such Fund's
Memorandum. As the investment manager and sponsor of the Funds, Pillar Capital makes decisions on
how each Fund should allocate its assets to certain investments; selects brokers, dealers, banks and other
counterparties or intermediaries by or through whom portfolio transactions will be executed or carried out;
monitors each Fund's investments; and makes all other necessary or appropriate recommendations to
carry out its portfolio management duties. Each of the Advisor’s Funds has different objectives and
characteristics, with varying allocations to investment instruments, such as catastrophe bonds and other
over-the-counter insurance-linked instruments. Pillar Capital does not tailor its advisory services to the
individual needs of Investors, although the Advisor's services are tailored to meet the investment
mandates of the Funds, as described in each Fund's Memorandum.
The Advisor has and may form and manage additional privately offered pooled investment vehicles in the
future for other qualified investors on a limited basis, which may be organized in the form of single member
limited liability entities. For purposes of this Brochure, all of the foregoing additional funds shall also be
referred to interchangeably herein as a “Fund” or a “Client”.
The Funds have entered into side letter agreements with certain Fund Investors. Such agreements could
provide such Fund Investors with different notification rights, certain reporting obligations and special fee
arrangements, but not preferential liquidity terms, among others. The Funds generally enter into side
letters only with Fund Investors who make substantial commitments of capital.
Wrap Fee Programs. Pillar Capital does not participate in any wrap fee programs.
Client Assets the Advisor Manages. Pillar Capital's Regulatory Assets Under Management as at
December 31, 2022, were approximately $3.166 billion.