Schroders Capital raises $70m to launch Coda cat bond fund for US investors

Schroders Capital has launched a new catastrophe bond fund that has been designed as an offering for US investors, raising $70 million from two clients earlier this month for the Schroders Capital Coda Fund.

The Schroders Capital Coda Fund is an insurance-linked securities (ILS) fund domiciled in the Cayman Islands that allocates capital primarily to tradable, public ILS instruments, with a focus on global natural catastrophe risks.

It’s a continued expansion of Schroders Capital’s ILS ambitions in the United States, establishing a dedicated vehicle that could prove more appealing to US institutional investors.

Of course, Schroders Capital is already one of the largest managers of catastrophe bond fund assets, with over $3 billion managed within this part of the ILS universe, alongside its ILS strategies that focus on the less-liquid parts of the market.

Long-standing Schroders Capital executive Daniel Ineichen will act as the lead portfolio manager for the Coda cat bond fund.

The company said that the Coda Fund is “designed to cater to US investors seeking to benefit from Schroders Capitals longstanding track record in ILS, going back to 2011.”

The Coda cat bond fund is an open-ended, actively managed strategy, that offers qualified investors twice-monthly liquidity.

Its primary objective is to generate absolute returns with a low correlation to traditional assets, as is typical in cat bonds and ILS strategies, while also seeking low interest rate duration and low credit risk.

Stephan Ruoff, Global Head of ILS, Schroders Capital, stated, “The successful launch of the Schroders Capital Coda Fund reinforces our commitment to expanding Schroders Capital’s ILS capabilities.

“Furthermore, it marks a significant milestone for Schroders Capital’s ILS division as we continue to further build our brand in the US market, offering investors the chance to potentially generating returns that historically remain uncorrelated to the broader financial markets.”