Press Releases: Trading Risk | Breaking News Alert | May 11th 2011
Trading Risk | Breaking News Alert | May 11th 2011
Clariden Leu shuts doors to cash influx
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Prominent ILS fund manager Clariden Leu has once again closed its flagship Swiss-domiciled cat bond fund to new capital inflows after cat bond issuance has failed to keep pace with investment intake.
'Exceptionally high' fund inflows from investors in recent months had not been matched by new cat bond issuance, the fund management team said in a statement to investors.
It would be difficult to maintain its objectives of offering investors attractive returns while managing a broadly diversified portfolio if it remained open to an influx of cash, it said.
It also wanted to shield existing investors from a dilution in performance.
This comes after brokers Aon Benfield Securities and GC Securities both predicted a quiet outlook for cat bond sales during the second quarter.
Despite making record first quarter sales, the cat bond market shrank by $223mn, GC Securities said.
There was a murky outlook on the sales pipeline for the rest of the year as some sponsors were taking a wait and see approach ahead of the 1 June renewals.
Clariden Leu only reopened its flagship cat bond fund in November after being forced to close in June 2010, when its investment intake was also outpacing new cat bond issuance.
The manager said it would accept an extra $145mn, or 20 percent of the fund's net asset value at the time.
The Swiss-based manager has $2.1bn of funds under management.
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Prominent ILS fund manager Clariden Leu has once again closed its flagship Swiss-domiciled cat bond fund to new capital inflows after cat bond issuance has failed to keep pace with investment intake.
'Exceptionally high' fund inflows from investors in recent months had not been matched by new cat bond issuance, the fund management team said in a statement to investors.
It would be difficult to maintain its objectives of offering investors attractive returns while managing a broadly diversified portfolio if it remained open to an influx of cash, it said.
It also wanted to shield existing investors from a dilution in performance.
This comes after brokers Aon Benfield Securities and GC Securities both predicted a quiet outlook for cat bond sales during the second quarter.
Despite making record first quarter sales, the cat bond market shrank by $223mn, GC Securities said.
There was a murky outlook on the sales pipeline for the rest of the year as some sponsors were taking a wait and see approach ahead of the 1 June renewals.
Clariden Leu only reopened its flagship cat bond fund in November after being forced to close in June 2010, when its investment intake was also outpacing new cat bond issuance.
The manager said it would accept an extra $145mn, or 20 percent of the fund's net asset value at the time.
The Swiss-based manager has $2.1bn of funds under management.