Ipac has made a $50 million cornerstone investment in a new catastrophe insurance fund to boost its exposure to alternatives.
Ipac Asset Management has boosted its exposure to insurance-linked strategies by investing $50 million in the Palmetto Australian Unit Trust.
Palmetto is managed by Bermuda-based Nephila Capital, which is 25 per cent owned by Man Investments.
Nephila uses catastrophe bonds, industry loss warranties and reinsurance contracts to construct portfolios.
Ipac chief investment officer Jeff Rogers said the investment in Palmetto continues ipac's strategy of diversifying the economic drivers of return in its clients' portfolios.
"To be successful in this sector, you need expertise in risk management and the capacity to access a wide variety of insurance-linked exposures," Rogers said.
"Our research identified Nephila Capital as a strongly resourced manager [which is] well-positioned to deliver a portfolio offering an attractive trade-off between return prospects and risk."
Man Investments relationship manager Daphne van der Oord said insurance-linked securities are clearly gaining broad acceptance from institutional investors and consultants.
"After the global financial crisis, investors are seeking independent return streams. Catastrophe reinsurance certainly provides that portfolio benefit," Van der Oord said.
In 2009, AMP Capital hired Nephila to manage a $44 million mandate that also invests in insurance-linked securities.
The two non-consecutive alphabetic letters encountered most often last week caused more controversy than the underlying policy they represented, Wouter Klijn writes.... read more »
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