Schroders continues its expansion in Life Insurance-Linked Securities with $420m raised for new fund

Schroders is today announcing that it has raised $420 million for its newly-launched Life Insurance-Linked Security (ILS) fund.

Life Insurance Linked II will offer investors significant diversification against traditional asset classes, coupled with the prospect of attractive risk-adjusted returns. The closed-end fund, which has a 10-year maturity, will be managed alongside several existing Life ILS funds and mandates.

The launch comes at a time when interest in Life ILS solutions from the global life insurance sector remains strong.

The fund is managed by Scott Mitchell, Portfolio Manager for Life ILS, supported by a team of specialist Life ILS investment professionals.

Schroders’ recent Institutional Investor Study 2020 indicated that investors plan to ramp up their allocations to private assets from 12.8% a year ago to 14.1% over the next 12 months, with 46% stating that an increase in their allocations to private assets would help manage risk.

Scott Mitchell, Portfolio Manager for Life ILS at Schroders said:

“Building on the successful launch of Schroders’ Life ILS strategy in 2017, we continue to focus on innovative trades similar to those we have supported in recent years. This latest capital raise, combined with a fund structure that caters for the illiquidity and duration profile of complex life deals, means that Schroders remains ideally positioned to support the industry’s and clients’ needs at a time of heightened focus on risk, capital and liquidity management.”

Stephan Ruoff, Head of ILS at Schroders, said:

“The launch of the new fund represents another milestone in Schroders’ ongoing growth in Life ILS. We have been active in the life insurance market since the launch of our first ILS fund in 2008. Our longstanding experience continues to contribute to the success of not only Life ILS, but also Schroders’ blended ILS (life and non-life) strategies.”

Claire Glennon, Co-Head of UK and Ireland Institutional, Schroders, said:

“This strategy is positioned to deliver secure income that helps support cash-flow driven requirements, robust yields and a strong diversifying element to our clients’ investment portfolios.

“Pension schemes are increasingly looking to increase their exposures to alternative assets and ILS strategies are well positioned to meet these investment objectives.” 

Schroders Private Assets and Alternatives business, a strategic growth area for the firm, manages £45.3 billion* in assets, including private equity, hedge funds, infrastructure finance, ILS, commodities, real estate, impact investing and securitised credit.

*As at 30 June, 2020