Securis Investment Partners, a UK-based manager that specialises in insurance risk-related assets, has launched a Ucits-regulated catastrophe bond fund.
The fund invests in a portfolio of catastrophe, of ‘cat’ bonds, a diversified range of risk-linked securities, exposed to catastrophe event risk (such as natural disasters) in different geographies.
The fund will target a net return of UD dollar Libor plus 4-5%, with low correlation to more traditional asset classes. An annual management fee aligned to the returns and liquidity available in the current market will be charged, but no performance fee will be levied.
A spokesperson for the firm said opportunities within the market were growing due to new perils, including terrorism, cybercrime and climate change.
Cat bonds were created in the mid-1990s, in the aftermath of Hurricane Andrew and the Northridge earthquake. If a catastrophe takes place during the term of the bond, investors lose money – the absence of such an event drives its returns.
Their performance is generally not impacted by financial market events, such as stock market volatility or interest rate movements. As a result, they can be a source of non-correlated returns.
Securis manages assets of around $3.5 billion (€3.2 billion).
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