King Ridge brings ILS funds back to London Stock Exchange as Cat Bond UCITS ETF lists

The London Stock Exchange is home to an insurance-linked securities fund strategy again, as the King Ridge Capital Advisors LLC managed UCITS exchange traded catastrophe bond fund (ETF) was listed on the exchange yesterday, further broadening its reach to investors.

Previously, the London Stock Exchange has been home to a number of listed insurance-linked investment fund strategies, but with the demise of CATCo that trend came to an end.

The London exchange had only been home to ILS fund strategies focused on reinsurance and retrocession before (Blue Capital and CATCo), so private ILS instruments had made up the portfolio of those listed.

Aside from that, the London trading venue is home to Helios Underwriting, which is a way to access returns from the Lloyd’s market, but that is not as uncorrelated as an ILS strategy given it comes with exposure to other risk factors outside of just the underwriting portfolio returns.

So access to true insurance-linked opportunities, where your return is solely focused on the performance of the underlying insurance-linked risks, have been absent from the London Stock Exchange ever since the previously listed ILS funds there fell by the wayside.

The KRC Cat Bond UCITS ETF fund, which specialist insurance-linked securities (ILS) investment manager King Ridge Capital Advisors launched in partnership with UCITS ETF white-label platform provider HANetf late last year has now become the first pure catastrophe bond investment fund ever to be listed on the London exchange.

From its launch, the KRC Cat Bond UCITS ETF fund had been listed on two European exchanges already, the Xetra electronic trading venue operated by the Frankfurt Stock Exchange and the Borsa Italiana.

Now, the KRC Cat Bond UCITS ETF is available on the London Stock Exchange since listing there yesterday, with USD available under ticker symbol CATB, and a GBP listing available under ticker ILS.

Since launch, the King Ridge managed catastrophe bond ETF has accumulated just over $3 million in net assets, so remains very small.

But it is early days and this king of cat bond strategy will take time to gain the attention of investors, but being accessible on major exchanges such as the LSE in London might result in growing inflows as it builds a track-record there.

Remember, the KRC Cat Bond UCITS ETF set another first for a catastrophe bond fund, being the first ever to launch with a lead market-maker in place as well.

Being exchange-listed can serve to raise the profile of investment fund strategies to larger cohorts of potential allocators, while regular pricing, increased transparency and greater accessibility can also enhance liquidity.

The investment manager said, “King Ridge Capital is proud to announce that the first UCITS ETF tracking the catastrophe-bond market is now live and trading on the London Stock Exchange.”

HANetf added, “We’re excited to announce the listing of KRC Cat Bond UCITS ETF on London Stock Exchange. The fund previously listed on Xetra and Borsa Italiana.”