Scandinavian ILS manager Entropics expands to Finland

Entropics Asset Management AB, the first insurance-linked securities (ILS) and catastrophe bond fund manager in Sweden, has expanded into Finland, by hiring a representative to help with marketing the cat bond fund to institutional investors in the country.

Entropics has hired Mika Mäkinen, a well-known actuary and executive in the Finnish insurance and reinsurance industry, to act as its representative. Mäkinen will operate as a country representative for Entropics through his company Helsingin Aktuaarikonsultointi Oy.

“Entropics offers investors access to uncorrelated returns and thus function as diversifiers in traditional portfolios. But they also provide benefits to those exposed to catastrophe risk by enabling insurance coverage, making them interesting from a responsibility perspective. I look forward to improving cat bond knowledge in Finland,” commented Mäkinen.

His goal will be to strengthen relations with institutional investors in Finland, educate them on the catastrophe bond and ILS asset class, introduce them to the UCITS SEF Entropics Cat Bond Fund, while also helping them to understand the implications of Solvency II capital regimes on the need for risk transfer and capital.

“In the Solvency 2 directive, cat bonds are considered an insurance risk on the asset side of the balance sheet. This contributes to a lower capital requirement compared to other asset classes with a similar return profile,” Mäkinen explained.

Previously, Mäkinen was CEO of the Retro Life Assurance Company Ltd and the Finnish Mutual Insurance Company for Pharmaceutical Injury Indemnities. Currently he runs an actuarial consultancy, Helsinki Actuarial Consulting, and is also a member of the board for mutual insurance company Pohjantähti.

Robert Lindblom, CEO of Entropics Asset Management AB, commented on the announcement; “We are very happy to have Mr Mäkinen joining our team. It will not only strengthen our dialogue with Finnish institutional investors but also contribute additional qualified mathematical and actuarial skills to Entropics.”

Entropics plans to target institutional investors in Finland for its SEF Entropics Cat Bond Fund to begin with, but may look to arrange distribution to the retail investment market in future as well.