UK-based investment manager Schroders has unveiled a Global Alternative Investor Access (GAIA) Cat Bond fund on its UCITS platform to offer investors with better access to hedge funds.
Daniel Ineichen, manager of the NGAR Secquaero insurance-linked securities (ILS) fund will manage the new fund with the ILS merged into the new mandate.
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The GAIA Cat Bond fund will be able to invest a minimum of 80% of the portfolio in catastrophe bonds, and the remaining in other insurance-linked securities.
The fund will primarily focus exposure in regions with high concentration of insured wealth such as the US, Western Europe and Japan.
The annual outperformance target of the fund is three-month US dollars Libor plus 6% per annum net of fees.
Ineichen 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.
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By GlobalData"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."
