Two experienced insurance-linked securities (ILS) and reinsurance linked investments executives are returning to the market with a new fund launch, the open-ended mutual Context Insurance Linked Income Fund.
Andrew Sterge and Pete Vloedman are well-known in the ILS and collateralized reinsurance space, having worked together at CooperNeff, Magnetar Capital and now coming together as the portfolio managers for this new ILS fund strategy.
The fund is being launched by alternative investments specialists Context Capital Partners alongside mutual fund product provider Rational Funds.
We wrote about Rational Funds ambitions to enter the ILS space back in October, when the firm filed for the launch of the Rational Insurance Linked Income Fund.
That fund has now been renamed to the Context Insurance Linked Income Fund.
We noted at the time that the portfolio managers for the Rational ILS fund had not been named and now it is clear that this fund is launching with a significant amount of market experience to back it, while the Rational Funds platform and also the Context Capital network will provide access to an alternatives savvy investor base.
The companies involved said the new mutual ILS fund will, “provide retail and institutional investors with simplified access to a unique insurance linked investment strategy.”
The strategy will invest across insurance-linked securities (ILS), with a particular focus on liquid assets so catastrophe bonds will be a focus, as well as other insurance-linked assets such as preferred stock.
The fund will aim to have very low correlation with broader financial factors, while offering returns sources from insurance and reinsurance linked assets selected by the portfolio management team.
With over 45 years combined experience in reinsurance and ILS, Sterge and Vloedman have extensive contacts in the sector which should make accessing investment opportunities easier than for some other mutual strategies that have launched in the past.
The focus on liquidity is also interesting, not least in terms of timing, as ILS investors are becoming keenly aware of the lack of liquidity in some collateralized reinsurance assets and some are searching for investment strategies that offer a higher level of liquidity.
Vloedman and Sterge, the Portfolio Managers of the fund, commented, “Rational Funds has a history of offering innovative alternative investment strategies to their investors and insurance-related investing fits well within this approach.”
Jerry Szilagyi, CEO of Rational Funds, added, “We strive to provide investors with superior risk-adjusted returns through systematic investment strategies, and believe that insurance-related investments are an exciting complement to the other investment strategies we offer.”
It will be interesting to see how rapidly this new Context Insurance Linked Income Fund can grow, as the latest mutual ILS investment fund to get off the starting blocks.