Investment Thesis

The three spring hailstorms that struck San Antonio on April 12, 17 and 25 of this year are projected to have caused over $2 billion in property damage. The April 12 storm alone is now considered the most costly hailstorm in Texas history. 

As has been widely documented, the storms caused a great deal of damage across large sections of San Antonio. And while these recent storms are unusually large in nature, the climatic conditions of south and central Texas lend themselves to conditions favorable to hail storm events in general. Between January 1, 2013 and December 31, 2015, Texas ranked number 1 in the nation for most hail damage reported with 394,572 claims during that period.1 Over the last 5 years, Texas has averaged 1,191 separate hail events per year. Over the last 10 years, that number has been 1,251 hail events per year, and over the last 20 years 1,342 events per year.2

While the effects of these types of storms are disruptive and expensive, they present a significant opportunity for an arbitrage investment strategy. Alternivest has been studying the dynamics of hail damage claim models to determine whether and how the post‐storm economic environment could provide investment opportunities. In addition to secondary market research, Alternivest brings to its analysis the following primary resources: 

  • Direct experience in the insurance damage claim model contemplated in this investment thesis
  • Previously established relationships with licensed public adjustors specializing in wind and hail damage claims. A public adjustor represents the insured instead of the insurance company to give a second and possibly more objective opinion of the extent of damage from a hail storm in case the policyholder wants to dispute the settlement amount.
  • Professional investment experience in factoring and receivables
  • Professional management experience in pooled investments in receivables
  • Professional experience and relationships with law firms specializing in insurance claim settlements

Based on the foregoing, Alternivest identified an opportunity to create a robust investment model focused on a damage claim model specific to hail storm damage claims. BVF Fund II was created to generate investment returns by focusing on the inefficiencies and opportunities created through these events. This is a private placement vehicle for accredited investors only. For more information, please contact us directly.