London headquartered specialist insurance linked securities (ILS) and reinsurance investments manager Securis Investment Partners has launched the Securis Catastrophe Bond Fund, a sub-fund of Northill Global Funds ICAV.
Targeting a net return of USD Libor + 4-5%, Securis noted that the catastrophe bond fund will display low correlation versus more traditional asset classes, while enabling investors to participate directly in the returns of pure catastrophe event risk.
Rob Procter, CEO of Securis Investment Partners LLP, commented on the launch; “Cat bonds have continued to achieve uncorrelated returns, demonstrating their resilience to financial market factors. The low yield environment and recent unstable market conditions for traditional assets have shown that cat bonds bring valuable risk diversification benefits to a broader investment portfolio. The asset class continues to offer long-term investors a compelling source of diversifying returns compared to many other investments.
“We believe the cat bond market has reached a state of maturity which makes this an opportune and exciting time for Securis to bring its first UCITS-compliant fund to market. So doing enables us to make best use of our strong cat bond market presence and leverage our existing analytical and portfolio construction capabilities, whilst broadening our investor base.
“As the supply of collateralised protection via cat bonds continues to prove attractive to both existing and new buyers of reinsurance protection, the application of ILS is widening as a risk transfer solution for issuers and investors alike. We believe that ILS will continue to favourably compensate investors for the risks they take on.”
This is the first UCITS-compliant fund to be managed by Securis, investing in a diversified portfolio of cat bonds across perils and geographies. The master fund, Northill Global Funds ICAV, is an Irish domiciled Collective Asset-management Vehicle.
Securis said that its new UCITS cat bond fund is focused on providing long-term value to investors and will charge an annual management fee aligned to the returns and liquidity available in the current market, and no performance fee.
Securis said that it sees opportunities within ILS as the asset class grows, with expansion expected as the reinsurance market broadens its reach. Securis expects that new perils, including terrorism, cyber risk and flood are set to emerge and will “serve to augment growth in the ILS market.”
Securis, with its team of 43 global ILS asset management and underwriting professionals, now manages approximately $3.5 billion within its funds and mandates and is one of the top-ten ILS managers by assets under management in our ILS fund managers directory.