Schroders' partial acquisition of Swiss-based asset manager, Secquareo Advisors, has borne fruit with the launch of a Ucits-regulated catastrophe bond fund.
The Schroders product results from the merging of Secquareo’s existing "cat" bond vehicle into the Schroders’ GAIA – or Global Alternative Investor Access - regulated hedge fund platform. The fund has been re-named the Schroder GAIA Cat Bond Fund.
In an interview with Massimo Tosato, executive vice chairman at Schroders, in the October 2013 issue of Funds Europe, Tosato says Schroders expects the catastrophe bond market to grow to $80-100 billion – or €58-73 billion – over the next five years from an estimated $50 billion now.
The fund invests globally in catastrophe bonds and other tradable insurance-linked products and is managed by Daniel Ineichen, manager of the NGAR Secquaero ILS Fund since inception in May 2011.
The fund’s outperformance target is three-month USD Libor plus 6% per annum net of fees.
In US dollar terms, the existing NGAR Secquaero ILS Fund has generated annualised returns of 7.27% since inception, according to Schroders.
Schroders announced the acquisition of 30% of Secquareo’s shares in April 2013.
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