City National Rochdale ILW fund grows another 7% to $191m

The industry-loss warranty (ILW) focused mutual insurance-linked securities (ILS) fund strategy offered by investment adviser City National Rochdale (CNR) has continued to grow in the last quarter of record, adding a further 7% to reach over $191 million in assets.

The City National Rochdale Select Strategies (CNRLX) fund is an interval style mutual fund that trades on an exchange and is largely invested in industry-loss warranties (ILW’s), but also holds some catastrophe bond positions as well.

Previously, the City National Rochdale Select Strategies Fund had grown its overall net assets by around 6% during the quarter to July 31st 2021, reaching just over $179 million.

The fund has added another roughly $12 million of net assets in the most recent quarter, or around 7%, to reach $191 million by October 31st 2021.

The ILW focused ILS investment fund had found more to deploy its capital into during that last quarter of record, as the value of its investments had risen by almost 11% in the period to reach nearly $175 million, with some renewal activity seemingly evident in the portfolio disclosure.

There is also appreciation within that 11% increase of course and many of the positions in the portfolio saw strong gains as seasonal premium flows boosted valuations for the fund.

The fund has a focus on investing across industry loss warranty (ILW) reinsurance and retrocession contracts, featuring global peak peril zones, and also regional U.S. ILW contracts as well, on top of some investments in certain catastrophe bonds.

The investments made by the fund are allocated to segregated accounts of the NB Re Ltd. reinsurance underwriting and transformer vehicle (previously named Iris Re), which is operated by and portfolio managed by the Neuberger Berman ILS team.

During the last quarter, some of the allocations to NB Re cells increased in size, which we assume was due to portfolio updates triggered by earlier summer renewal activity.

The CNR mutual ILS fund accesses the returns of the reinsurance and retro market through ILW’s therefore and sources its risk-linked investments through its relationship with asset manager Neuberger Berman’s experienced ILW and index trigger focused reinsurance investment team.

When we last covered this ILW focused investment fund we explained that the share price for the CNRLX strategy had risen right through the US wind season, even during hurricane Ida’s approach and impacts.

The share price gains have continued it seems and the share price for the City National Rochdale Select Strategies fund is now some 6% higher than it began the year.

The focus on industry loss triggers will have assisted, as despite hurricane Ida’s significant loss impact for some collateralized reinsurance markets and retrocessionaires, the ILW market was less affected.