Schroders launches a Cat Bond fund on GAIA platform
Schroders launches a Cat Bond fund on GAIA platform
Schroders is pleased to announce the launch of Schroder GAIA Cat Bond (‘the Fund’) on its UCITS platform. GAIA (Global Alternative Investor Access) is a regulated, transparently operated platform for UCITS funds designed to give investors easier access to hedge funds. The new Fund invests globally in catastrophe (cat) bonds (minimum 80%1 ) and other tradable insurance-linked securities (ILS). The Fund’s exposure will be primarily in regions with a high concentration of insured wealth such as the United States, Western Europe and Japan.
The Fund will be managed by Daniel Ineichen, who has been manager of the NGAR Secquaero ILS Fund since inception in May 2011; this fund merges into the Schroder GAIA Cat Bond today. Daniel has been a dedicated ILS portfolio manager since joining Secquaero Advisors in December 2007 and transferred to the Schroders ILS team in June 20132 . The primary objective of Schroder GAIA Cat Bond is to generate a positive performance over the medium to long-term through investing in a diversified portfolio of tradable insurance-linked instruments with a focus on cat bonds. The Fund’s outperformance target is 3 month USD Libor + 6% p.a. net of fees and it seeks to generate total returns with a low correlation to traditional assets. The existing NGAR Secquaero ILS Fund has a strong track record, having generated annualised returns of 7.27% since inception3.
Research and modelling for insurance-linked securities primarily takes place at Secquaero Advisors, the exclusive investment advisor to Schroders for the range of ILS strategies. The portfolios are actively managed by Schroders’ ILS investment desk in Zurich, while cat bonds and currency (for hedging) trading is executed by the fixed income and foreign exchange trading desks respectively in London.
Daniel Ineichen, Fund Manager of Schroder GAIA Cat Bond, said:
“We are very pleased to be merging the fund onto the GAIA platform, which has grown to become one of the leading UCITS distribution platforms in alternatives investment. This is an exciting asset class with a strong investment case, combining attractive returns with a low correlation to other asset classes. The floating rate structure of cat bonds provides protection against rising interest rates, which is a widely acknowledged investor concern.”
Dr Hans-Peter Boller, Managing Partner and co-founder, Secquaero Advisors, commented:
“We have an excellent team with a wealth of experience and a strong performance record, particularly in managing tail risks so we are well positioned to offer this fund to a wider audience in the UCITS space. Beyond our experience in the insurance industry, one of our key differentiators is our proprietary portfolio management tool SPOT, with which we can analyse the impact of a new security on the overall fund and manage the risk profile of the portfolio. Given the nature of ILS, tail risk management is a key skill.”
Eric Bertrand, Director, Schroder GAIA, also commented:
“We are constantly on the look out for high-quality managers to join Schroder GAIA as part of our due diligence process. This is an exciting partnership with a unique offering because of the combination of Schroders’ distribution framework and extensive resources in client servicing, investment support and risk management, combined with state of the art portfolio construction skills as well as Secquaero’s profound insurance knowledge and proven underwriting experience in each segment of the insurance market.”
The GAIA platform was launched in November 2009 and has reached $2,505m in assets under management4. It combines the strength of Schroders’ renowned asset management expertise and extensive distribution capability with access to the specialist expertise of leading hedge funds – including those that may have previously been inaccessible to many investors. GAIA offers access to liquid alternative investment strategies with a low correlation to mainstream market returns but within the safeguards of a mutual fund subject to ‘gold standard’ regulation.
Schroders has seven funds on the platform, five managed by external hedge fund managers (Schroder GAIA CQS Credit, Schroder GAIA Egerton Equity, Schroder GAIA Sirios US Equity, the recently announced Schroder GAIA Avoca Credit (launching on 7 November) and the newly added Schroder GAIA Cat Bond) and two managed internally (Schroder GAIA Global Macro Bond and Schroder GAIA QEP Global Absolute).
1 This is an internal guideline.
2 Investment management for ILS strategies was assumed by Schroder Investment Management (Switzerland) AG (SIMSAG).
3 Secquaero in USD net of fees since inception (15 August 2011) to 30 September 2013.
4 Schroders, as at 30 September 2013.
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Notes to Editors
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Schroders is a global asset management company with £255.8 billion (EUR298.5 billion/$388.0 billion)* under management as at 30 June 2013. Our clients are major financial institutions including pension funds, banks and insurance companies, local and public authorities, governments, charities, high net worth individuals and retail investors.
With one of the largest networks of offices of any dedicated asset management company, we operate from 34 offices in 27 countries across Europe, the Americas, Asia and the Middle East. Schroders has developed under stable ownership for over 200 years and long-term thinking governs our approach to investing, building client relationships and growing our business.
*Source: Schroders, all data pro forma as at 30 June 2013, including Cazenove Capital assets under management Further information about Schroders can be found at www.schroders.com.
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