Investments

At PartnerRe, we view investment risk as an integral part of our core business, providing valuable diversification to our consolidated risk portfolio along with additional opportunities to enhance our overall returns. Both our capital markets risks and reinsurance risks are managed within one integrated risk management framework, which identifies key risk factors, and sets appropriate risk appetite and limits.

At the end of December 2009, following the acquisition of PARIS RE, we had $18 billion in invested assets (including Funds Held-Directly Managed Portfolio). The majority of our assets are managed in-house by our Capital Markets Group, a professional investment management division responsible for:

• The safe investment of the funds we set aside to fulfill our reinsurance obligations. This is the remit of our Fixed Income business unit, which invests solely in standard, high quality, liquid assets.
• Pursuing attractive capital markets risks that will enhance the diversification and returns of our consolidated risk portfolio. This is the role of our Capital Assets business unit, which focuses on four product lines:
• Equities
• Principal Finance
• Private Equity

PartnerRe plays an active role in the converging reinsurance and capital markets arena. We have the market expertise, risk management skills and capacity to partner with other re/insurance and financial institutions to successfully create, assume and participate in alternative risk transfer solutions.