Leadenhall launches UCITS cat bond fund, ILS assets pass $2.4bn

Specialist insurance and reinsurance linked investment manager Leadenhall Capital Partners LLP has launched its first UCITS investment fund towards the end of 2015, helping to take its total ILS assets under management to over $2.4 billion.

The new UCITS fund launch sees Leadenhall operating its first catastrophe bond only investment fund. Named the Leadenhall UCITS ILS Fund, the strategy launched at the end of the year with $80m under management, allocating all of the assets to a portfolio before launching on the 22nd December.

Leadenhall has operated a number of open-ended ILS funds, including the non-life focused Leadenhall Value Insurance Linked Investments Fund, the non-life and life Leadenhall Diversified Insurance Linked Investments Fund and the pure life ILS investment fund Leadenhall Life Insurance Linked Investments Fund.

All three of those funds invest across the ILS product range, of collateralised reinsurance, private ILS, ILW’s, catastrophe swaps and others, but the UCITS strategy is the first to be solely focused on cat bond investments.

Luca Albertini, CEO of Leadenhall Capital Partners, explained to Artemis that while late to the UCITS game compared to some other managers, the firm now sees compelling reasons to launch the strategy.

“We have always been concerned with the product’s eligibility for retail distribution and we believe the product distribution should be very tightly managed to be either with skilled institutional investors or via skilled advisors to high net worth,” Albertini explained.

UCITS strategies are much more simple to access for retail type investors, hence control of distribution is vital for managers that believe the asset class is best suited for a sophisticated investor base.

Albertini continued; “On the other hand we have noticed that some of the institutional investors investing in or considering our other funds do have pocket of assets which are UCITS constrained. We have also noted at some investors looking at starting with the liquid and transparent product and then change or complementing the investment with other strategies.

“We have therefore decided to launch the fund whilst ensuring we maintain full control of the distribution within a highly sophisticated investor base.”

Albertini also said that in deploying the $80m of capital raised for the UCITS fund it was possible to build a portfolio “at attractive prices” despite the year-end holiday period in December.

The UCITS fund launch has contributed to continued growth in ILS and reinsurance-linked assets under management at Leadenhall, now reaching $2.412 billion. The remaining growth has been seen across the managers funds and existing managed account relationships.

Leadenhall Capital Partners LLP remains one of the top-ten ILS managers by assets under management in our ILS fund managers directory.