The DCG Iris insurance-linked securities fund has issued 9,174,000 new Sterling Shares at a price of 101.12 pence per share as it closes its latest round of fund-raising which we had written was underway in April. The additional shares grow the fund, which is managed by Dexion Capital as a feeder fund into a Credit Suisse managed ILS fund, by just under £9.28m and gives it a market capitalisation of £62.1m according to listing information on the London Stock Exchange.
The DCG Iris ILS fund is a listed closed end ILS investment fund operated by investment manager Dexion Capital. It launched with around £40m of share capital and then launched a share placement programme under which it had its first placing in December, when an additional 11m shares were issued taking the ILS fund to around £51m in size.
DCG Iris acts as a feeder fund and invests all of its capital assets in Credit Suisse’s CS IRIS Low Volatility Plus Fund. CS IRIS invests in a broadly diversified portfolio of insurance-linked contracts, securities and catastrophe bonds as well as various types of investments related to reinsurance and catastrophe risks.
DCG Iris had hoped to increase its assets under management to £150m by 30th June 2013. We assume that the fund will continue to look for new investors over the next month. The fund has so far failed to reach the capital raising targets that it set itself. When it launched it said it hoped to attract £200m of capital, but only managed around £40m, and now it looks unlikely that it will hit the £150m milestone by the end of June.
Raising capital for ILS funds is not as easy as you might think and perhaps DCG Iris has been a little optimistic that its low volatility strategy would be more attractive to investors looking for Sterling shares in the UK. A slow and steady build up of capital while still in its first year is perhaps better for the fund, as once it has a full year track record to show to prospective investors it might find it attracts greater allocations and inflows.
DCG Iris has applied to have the new shares listed on the LSE and it expects that the listing will be completed on the 28th May. After this successful listing DCG Iris will have 60,299,440 shares listed on the exchange.