London & Capital, a wealth management firm headquartered in the UK, has launched a new proposition for what are called “cell captives” – smaller captive insurance companies.

(Captive insurance firms are companies that provide risk-mitigation services for its parent company; such firms may be formed if the parent company is unable to find an outside firm to insure against a particular business risk, among other reasons.)

London & Capital’s “managed portfolio” offering targets segregated portfolio companies, aiming to enable them to tap into investment returns previously accessible only by larger captives, L&C said. It also expects clients to enjoy the economies of scale and benefits of diversification that result from the pooling of a number of separate accounts, it continued.

The managed portfolio service offers cell captives higher targeted returns, a low-risk investment approach, transparency of daily reporting and access to their own unique account, and at a low cost, L&C said in a statement.

London & Capital has been managing captive assets since 2005 when partner, William Dalziel, set up a captive division.

Until now, the firm’s captive mandates have been in excess of $5 million, and typically invested in cash and fixed income. In performance terms, its balanced strategy for captives - which is invested 85 per cent in fixed income and 15 per cent low-risk equities - has returned in excess of 9.6 per cent this year (at 30 September 2012). 

The firm caters for cells with as little as $200,000 to invest.