Leadenhall launches catastrophe bond fund for AUS-NZ in partnership with Bennelong

Leadenhall Capital Partners LLP, the London-headquartered specialist insurance-linked securities (ILS) and reinsurance linked investment manager, has launched a new catastrophe bond fund targeting investors in Australia and New Zealand, working in partnership with Bennelong Funds Management.

Almost a year ago, Leadenhall and Bennelong announced a distribution agreement that would see Bennelong Funds Management distributing the Leadenhall Capital Partners existing range of insurance linked securities (ILS) fund strategies to institutional investors in Australia and New Zealand.

Now, Leadenhall has established a dedicated cat bond fund strategy for the region, launching the LCP Insurance Linked Securities Fund as a strategy that will invest in catastrophe bonds and be offered to investors across Australia and New Zealand.

The two firms said the new ILS fund strategy will bring the unique asset class to institutional investors in the region, offering all the benefits of its historically low correlation to traditional investment markets and economic conditions, providing investors with a valuable opportunity for portfolio diversification.

Lorenzo Volpi, Deputy CEO and Managing Partner of Leadenhall, highlighted the importance of the strategic partnership with Bennelong in launching the new cat bond fund.

Volpi explained, “With Bennelong’s strong local presence and expertise, we believe we can deliver exceptional value to investors.

“This partnership has allowed us to introduce a product that not only diversifies portfolios but also brings innovative investment opportunities to Australia and New Zealand.”

John Burke, CEO of Bennelong further stated that the timing is opportune to bring a new ILS fund strategy to the Australia and New Zealand market.

Burke said, “With insurance premiums increasing globally in recent times, an ILS strategy like this can really benefit investors, as the higher premiums are passed through.

“The Australian market has had limited access to these assets, and the current market environment presents an attractive opportunity.

“Working with Leadenhall’s experienced team to bring this offering to investors has been a pleasure, and we look forward to continue working with them as we distribute the product to our institutional and wholesale investors.”

The LCP Insurance Linked Securities Fund will allocate its capital to catastrophe bonds, providing investors with access to the returns of pure insurance risk covering natural catastrophe events.

The timing could be opportune, as there has been increased interest in ILS among large investors in Australia and New Zealand of late, with flows into insurance-linked securities (ILS) strategies from the region having increased and investors there highlighting their desire to allocate to ILS fund strategies of late.