Dexion Capital floats closed ended fund to invest in Credit Suisse risk portfolio
Dexion Capital is floating DCG IRIS on the London Stock Exchange, which will invest in a portfolio of insurance-linked strategies managed by Credit Suittse.
The fund’s IPO will close by mid-June 2012. Investments will target a portfolio of catastrophe risk, with a net return target of Libor + 5%-7%, and annual volatility of 2%-4%.
The Credit Suisse IRIS Low Volatility Plus Fund will be designated the ‘master fund’.
Dexion said that investors should benefit from the diversification that the portfolio offers, through exposure to uncorrelated events, including hurricanes, earthquakes, aviation, marine and typhoons.
Ana Haurie, Group managing director of Dexion Capital said: “The catastrophe reinsurance market offers investors a diversified source of returns which are attractively priced at a time when traditional portfolio diversifiers such as government bonds and gold are fully priced with high potential risk. The experienced Credit Suisse ILS team are specialist risk managers with extensive knowledge of meteorology and insurance, and a long track record in this field. We believe that investors will quickly grasp the benefits of this opportunity with increasing numbers of institutions entering the space.”