AMP Capital Investors has made a US$35 million allocation to catastrophe bonds in its Future Directions fund.
The fund-of-funds, run by Sean Henaghan, has selected the Man Investments associate company Nephila Capital to invest the mandate. Nephila is an alternatives manager specialising in catastrophe bonds and other insurance-linked securities. It was set up in 1997 by Frank Majors and Greg Hagood as a subsidiary of Willis Ltd, the world’s third-largest insurance broker.
Henaghan, the investment director at Future Directions, said the firm was impressed with the non-correlation of the returns of insurance-linked securities with the rest of the portfolio, as well as the quality of the Nephila team and track record.
“The current environment is particularly attractive, since capital in the insurance industry is scarce and premiums are at levels not seen in a long time,” he said.
Mercer Investment Consulting, which recently orchestrated the first longevity bond swap in the UK and has been a big supporter of insurance-linked investments, advised on the mandate.
