Swiss-based independent investment managers Dynapartners Ltd., an affiliate of TCMG Asset Management, is planning the launch of its first UCITS insurance-linked securities (ILS) fund in the second half of this year as it puts its new ILS team to work.
TCMG Asset Management, majority owned by Raiffeisen Switzerland through Notenstein Private Bank, operates a number of boutique, or niche, asset managers including the total return focused Dynapartners.
Back in March it came to light that Dynapartners were branching out into the ILS asset class with the hire of an experienced team of three that previously managed the Falcon ILS fund before Twelve Capital took over the management of the Falcon portfolio.
Dr. Gregor Gawron, Beat Huggler and Stephan Gaschen formally joined Dynapartners in May, since when they have been planning the firms first ILS focused investment fund strategy.
Martin Hüppi, CIO at Dynapartners, commented at the time; “We are delighted that with Gregor, Beat and Stephan we have a team of proven ILS experts with a strong track record managing and supporting this attractive investment opportunity. With their experience in managing ILS mandates and funds, they further drive the growth of Dynapartners’ products and services offering ahead.”
Dr. Gregor Gawron, the new head of ILS investments at Dynapartners, added; “ILS as an asset class continues to offer a significant return advantage over other comparable fixed income instruments. This circumstance together with their independence from other asset classes make CAT bonds an attractive addition in every portfolio.”
Dynapartners received formal approval for its expansion into ILS from the Swiss Financial Market Supervisory Authority (FINMA) on April 30th 2014, putting it ready to begin the operational set up for its first ILS fund strategy.
The first ILS fund from Dynapartners will be a UCITS fund, investing in a broadly diversified portfolio of catastrophe bonds, a very similar strategy to the Falcon fund the team previously managed. Being cat bond only the Dynapartners ILS fund will offer its investors weekly liquidity opportunities. The firm plans to launch the fund in the second half of this year.
The new Dynapartners ILS team each have more than 10 years of experience in the ILS space, managing portfolios of catastrophe bond and ILS instruments or analysing investment opportunities. The track record should stand them in good stead to attract capital, although given the timing they will face the same issue, of the current low cat bond pricing and the difficulty that can pose to building a new portfolio, that other managers are currently faced with.
Britta Häberling, CEO of Dynapartners Ltd., told finews.ch in an interview that ILS was a good fit for the firm as it has a focus on specialty investment products.