Swiss Re Insurance-Linked Fund Management

Xactanalysis Insights and PCS

DCG Iris resolves Sandy segregated shares, converts and issues new Shares


Hurricane Sandy is almost in the past for one of the London listed insurance-linked securities investment funds. The DCG Iris ILS fund, operated by investment manager Dexion Capital, has converted its C Share class back into Ordinary Shares and has listed the new Ordinary Shares back on the London Stock Exchange.

This almost marks the end of any threat to investors in the DCG Iris ILS fund from hurricane Sandy. DCG Iris is an exchange listed fund which acts as a feeder of sorts to Credit Suisse’s CS Iris Low Volatility Plus fund (the Master Fund). DCG Iris invests all of its assets in the CS Iris Low Volatility Plus fund and as a result has exposure to any events that CS Iris is threatened by.

As a result of potential exposures through its investments in CS Iris, the DCG Iris fund managers postponed merging the C Share class with the Ordinary share class to effectively segregate newly raised capital from any threatened investments and to safeguard these new investor allocations from potential Sandy losses until they were better understood. As we wrote at the beginning of February here, the picture of Sandy now looks much better for both CS Iris and DCG Iris and as a result DCG Iris planned to convert these C Shares back into Ordinary Shares.

This conversion occurred on the 8th March, when DCG Iris converted the C Shares using an NAV from 31st January for calculating the conversion ratio. The ratio was worked out to be 0.9956 of a Sterling Share for every one Sterling C Share held. This resulted in the creation of 10,976,490 new Sterling Shares.

These new shares were admitted for listing on the London Stock Exchange on Friday as well, leaving the fund with a total of 51,125,440 shares now listed on the LSE all in the same Sterling Share class, with a value of around £51m.

Though DCG Iris has resolved its C Share class and merged them back into the ordinary class of shares, and Credit Suisse planns to begin resolving its side-pockets imminently as we wrote recently here. DCG Iris still has potential exposure to the four investments which remain in a side-pocket of the CS Iris fund. There still could be some impact to DCG Iris investors from hurricane Sandy but the risk and the size of any impact will likely now be small.

Register today for ILS NYC 2023, our next insurance-linked securities (ILS) market conference. Held in New York City, February 10th, 2023.

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