Tenax Capital, a London based hedge fund founded by its CEO Massimo Figna, is about to launch its first ILS strategy, a UCITS compliant catastrophe bond investment fund.
Tenax Capital has been better known for its credit investment and financial equity funds, in which it manages money from clients including insurers, as well as for its deep links into the European insurance market.
But now the asset manager is expanding into the insurance-linked securities (ILS) and reinsurance linked investments market, targeting a capital raise of about €250 million to launch its first ILS strategy.
The UCITS catastrophe bond fund, officially named the Tenax ILS UCITS Fund, is an Irish domiciled fund structure, and has received approval for launch by the Central Bank of Ireland in recent days.
Tenax Capital has hired Marco della Giacoma, previously of Swiss Re Capital Markets, as co-portfolio manager of its catastrophe bond fund.
della Giacoma told Artemis; “We are excited to make our debut in the ILS space and we believe the cat bond market can offer to our long-term investors attractive returns and low correlation with other classes of investments.
“We expect continuous growth in the cat bond market as an alternative source of capacity for the re/insurance industry. Alternative capital is here to meet sponsors’ increasing need for coverage, provide protection against risk concentration in highly exposed areas and help insurers managing regulatory capital requirements.”
The fund will primarily invest into cat bonds during its initial phase of operations, due to the liquidity constraints placed on UCITS funds, however the asset manager ambitions are bigger, and within two to three years it hopes to substantially grow in asset under management and expand into other areas of the ILS and reinsurance linked investments market.
With catastrophe bond market activity and issuance strong at this point in time, Tenax Capital has launched at an opportune moment to take advantage of the availability of investment opportunities, which should see it able to deploy its capital to construct a first portfolio more easily than it perhaps would have been a year ago.
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