A new Guernsey fund is being launched by a firm aiming to increase investor exposure to its specialised Insurance Linked Securities (ILS) portfolio.
London-based Securis Investment Partners has launched a Guernsey-incorporated, closed-ended fund, Securis Income Fund Limited. It will list on the main market of the London Stock Exchange and be a feeder fund of the firm's flagship ILS, Securis I Master Fund.
ILS are capital market vehicles that allow a company to shed a risk. The most common form of ILS is the catastrophe bond, where insurers manage their exposure to natural disasters by passing on potential losses to investors. The Securis I Master Fund was launched five years ago and specialises in catastrophe bonds, longevity and mortality risk. It has delivered an 11.6% return in the period from October 2005 to January 2011, with annualized volatility of 1.9%.
The Securis I Master Fund is expected to receive the investment assets raised from the listing of the Securis Income Fund Limited. Shares are being offered to institutional and sophisticated investors denominated in USD and GBP currency classes through a placing expected to close on 11 March 2011. It will seek to deliver a target total return of 12% net per annum from its public fundraising from which it intends to pay a 6% annual gross dividend.
Securis said there is a low correlation between insured catastrophes/mortality and many financial markets.
"The Securis Income Fund provides a wider audience with access to this strategy and we believe that investors will welcome the opportunity to invest in an income fund that offers diversification into cash-generative insurance and reinsurance markets," said Rob Procter, Managing Partner and Co-Founder of Securis Investment Partners LLP.
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