Swiss Re Insurance-Linked Fund Management

Original Risk: A Society for Change Agents

DCG Iris investors approve winding up of ILS fund


The London Stock Exchange listed shares of the DCG Iris London-listed insurance-linked securities (ILS) fund will soon be no more, after its investors approved a proposal to wind-up and liquidate the ILS fund’s assets today.

As we wrote earlier, DCG Iris’ shares had been suspended from trading on the exchange while an extraordinary general meeting took place this morning to decide on the funds winding up.

Now, an announcement has been published stating that investors voted in favour of the liquidation and closing of the ILS fund. It states that DCG Iris was put into members’ voluntary liquidation after the conclusion of the EGM today.

The company expects that the redemption proceeds of the Master Fund shares, from the Credit Suisse run CS Iris Low Volatility fund, would be received by 30th November 2014 (subject to the Master Fund having certain rights to postpone or defer redemptions). The company expects the redeemed funds will be dispatched to the Shareholders of record as soon as practical after receipt of redemption proceeds.

So the DCG Iris story comes to a close. Interestingly, while DCG Iris failed to grow significantly, the Master Fund run by Credit Suisse grew tripled its assets under management from $635m to just under $1.82 billion in its last full financial year to the end of May.

The DCG Iris directors cite the soft premium environment in the reinsurance market and the fund’s current small size as reasons for the proposal to wind it up. At a small size the NAV total return was not significant enough to garner interest to maintain a reasonable return to investors it seems, although Credit Suisse’s clear success with the fund that acts as the Master to DCG Iris perhaps makes it a little puzzling why the sub-fund was a failure.

The London listed ILS fund approach still seems a valid one, with other funds such as CATCo Investment Management’s and Blue Capital Management’s both successfully raising capital and delivering returns to investors. At this time, with the reinsurance market so soft, it is unlikely that anyone else will attempt to launch a similar fund but in the future the listed approach will again attract ILS managers seeking access to a different type of investor who want the liquidity of a listed stock.

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