Sweden launches first cat bond fund

Sweden is set to get its first cat bond fund, to be extended by Entropics Asset Management, subject to approval from the Swedish Supervisory Authority.

The fund’s investment focus will be in the cat bond space and the company’s CEO, Robert Lindblom, says that the motivation behind the establishment of a cat bond fund is to satisfy demand.

“The intention is to bring cat bonds to Swedish investors, many of whom still lack resources and expertise to invest in the cat bond market”, explains Lindblom.

He adds that investors are “looking for new asset classes with good risk adjusted return and low correlation with traditional asset classes.”

Sweden is the latest domicile to consider the potential of cat funds, which have become a key feature of the success of the Bermuda re/insurance market, driven by appetite for alternative investment opportunities among pension funds and institutional investors.