Schroders sees strong growth in cat bond and ILS assets

by Artemis on January 28, 2014

Investment management group Schroders has seen significant growth in the assets under management of its catastrophe bond and insurance-linked securities (ILS) fund strategies, as well as a broadening of its investor base in recent months.

Schroders GAIA Cat Bond fund, which launched as a result of merging the Secquaero Advisors NGAR Secquaero ILS fund into Schroders Global Alternative Investor Access (GAIA) UCITS regulated hedge fund platform in October 2013, has been experiencing strong demand from investors since the fund became part of the GAIA fund range.

When the Secquaero cat bond fund was merged into Schroders GAIA platform, on the 21st October 2013, it had assets under management of just over $100m. With the increased reach of the Schroders investment management group and the broader access and recognition that a UCITS strategy can provide, assets have grown steadily. By the 24th January 2014 the fund’s assets under management had reached an impressive $430m.

Tim van Duren, Product Manager for Insurance-Linked Securities at Schroders, told Artemis; “The broadening out of the fund’s client base and growth since we moved it into Schroders’ GAIA fund range, our UCITS alternatives platform, has been encouraging. We are now speaking with clients throughout the whole of Europe, in Asia and the Middle East.”

The Schroder GAIA Cat Bond fund was recently approved for distribution and sale in France, one of the European countries which requires UCITS funds to be formally approved, opening up another group of potential investors to the firms cat bond investment strategy.

Schroders also offers a broader  ILS investment fund strategy, called the Schroder IF Core ILS fund, which it launched on the 30th September 2013. This fund invests in a combination of catastrophe bonds and private ILS transactions with a focus on catastrophe risk.

The SIF Core ILS fund has also seen impressive growth, with its assets under management reaching $260m in just three months since the strategies launch.

Tim van Duren said; “We see a lot of interest from mid to large size pension funds in our Schroder IF Core ILS fund, in particular in Switzerland, the UK and Scandinavia.”

Schroders has also recently started its first ILS mandate as well. It recently began managing a pure cat bond private segregated account for a large UK investor client.

Schroders acquired 30% of specialist Switzerland based ILS and reinsurance investment manager Secquaero Advisors  in May 2013. Secquaero Advisors acts as investment advisor to Schroders for its range of ILS investment strategies.

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