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Schroders launches catastrophe bond fund
by James Phillipps on Oct 21, 2013 at 10:54
Schroders has launched a catastrophe bond fund on its offshore Gaia Ucits platform.
The Schroder Gaia Cat Bond fund will be managed by Daniel Ineichen, who moved over to the group in June from Secquaero Advisors. The NGAR Secquaero ILS fund he previously managed has been merged into the new Schroders vehicle.
The fund will hold a minimum 80% directly in cat bonds with the remainder held in a range of insurance-linked securities and will target an annualised return of US three month Libor plus 6% after charges.
Research and modelling of the underlying holdings is being primarily carried out by Secquaero Advisors, which provides advice to Schroders on insurance-linked strategies with Schroders carrying out the portfolio management.
Ineichen said: ‘This is an exciting asset class with a strong investment case, combining attractive returns with a low correlation to other asset classes. The floating rate structure of cat bonds provides protection against rising interest rates, which is a widely acknowledged investor concern.'
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