A number of UBS Global Asset Management subsidiaries have taken a 5.46% holding in the London stock exchange listed Blue Capital Global Reinsurance Fund, the latest multi-asset manager to take a large chunk of the fund.
The appetite to invest in insurance and reinsurance linked investment funds remains strong in the multi-asset management community and listed vehicles such as the Blue Capital fund are often preferred, as they meet any specified mandates for greater liquidity.
UBS Global Asset Management took its holding in the Blue Capital Management operated reinsurance fund over the 5% threshold, at which it has to be reported, to over 10.8m shares or 5.46% on the 19th February.
The 5.46% stake in the Blue Capital fund is split between UBS subsidiaries as follows. UBS Global Asset Management (Americas) Inc holds 1m shares, or 0.5% of the voting rights. UBS Global Asset Management (Australia) Limited holds 6,174,830 shares, which is the largest stake at 3.1%. UBS Global Asset Management (UK) Limited holds 3,694,326 shares, which equates to 1.86%.
Two other asset managers changed their allocations to the Blue Capital fund recently. Quilter Cheviot Limited, a discretionary investment manager for largely private clients, trusts, charities and pension funds, dropped its stake in the fund to 4.65% after selling 2.58m shares on the 19th February. AXA Investment Managers SA also lowered its stake slightly, selling just 100,000 shares on the 11th February, to drop to a 4.97% holding.
The Blue Capital Global Reinsurance Fund has proved popular with investment managers of multi-asset class funds and private multi-asset class mandates, such as these three. It provides a great access point to reinsurance and catastrophe risk returns, with all the added benefits of liquidity due to its stock exchange listing.
We’d expect the listed fund model to benefit from any search for lower correlated asset classes, such as the one we highlighted the other day. When financial markets look dicey and correlations rise, the low volatility and low correlation of a reinsurance linked investment fund is bound to attract more attention.