Entropics Asset Management AB, the first insurance-linked securities (ILS) and catastrophe bond fund manager located in Scandinavia, has begun deploying its first capital raised into catastrophe bonds, as it seeks to build its portfolio.
It’s not often that you get to follow the start-up of a new catastrophe bond or ILS fund, but Entropics have been very transparent while preparing to launch. Now, having recently raised its first third-party capital with over £8m of investment from Movestic, part of the Chesnara Group, the ILS manager is beginning to put that capital to work.
Entropics has been active in the cat bond market over the last two weeks since raising the first capital, buying positions in bonds that provide the return profile the manager is looking to acquire for its SEF Entropics Cat Bond Fund.
So far Entropics has deployed around 25% of the funds assets raised from the initial investment into cat bonds. As a new fund Entropics is keen to maintain its diversification and so will have to take opportunities as they arrive and present themselves.
The ILS manager said that while it is eager to get up and running and deploy its capital, it is also determined to follow its investment guidelines and views when evaluating every security, so it won’t be rushed.
The current portfolio of catastrophe bonds that Entropics is beginning to build has a yield of just over 5.5%, which is in line with the ILS managers targets.