LONDON, April 4 (Reuters) - London-based investment fund Securis Investment Partners LLP has pulled the proposed listing of its closed end investment company from the London Stock Exchange (LSE), citing the Japan earthquake’s detrimental impact.
Just two months after the specialist investor announced the public listing to increase its exposure to its Insurance Linked Securities (ILS) portfolio, the firm said the fundraising for the new vehicle is currently “on hold and under review” in a statement on Monday.
“The proposed new closed-ended fund has been adversely affected by equity market conditions - which see investors cautious and very focused on vanilla investments - and of course the Japanese earthquake has caused deep uncertainty in the financial, commodity and insurance markets,” Securis Investment Partners commented.
ILS are capital market vehicles that allow a company to shed a risk. The most common form of ILS is the catastrophe bond - in which insurers manage their exposure to natural disasters by passing on potential losses to investors.
The new vehicle, Securis Income Fund Limited, was to be a closed-end, Guernsey-incorporated investment company, which would have acted as a feeder fund for the firm’s flagship ILS Securis I Master Fund.
Securis said it had successfully raised additional capital of around $140 million from institutional investors for the open ended fund year-to-date.
Securis was seeking to deliver a target total return of 12 percent net per annum from it public fundraising from which it intended to pay a six percent annual gross dividend.
“Securis and its placing agent Dexion remain encouraged by the feedback from investors and will keep the situation under review,” the firm said.
The Cayman Islands-based Securis I Fund was launched five years ago and specialises in catastrophe bonds, longevity and mortality risk. It has delivered an 11.6 percent return in the period from October 2005 to January 2011, with annualized volatility of 1.9 percent.
(Editing by Ron Askew)
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