Calamos & Aksia launch interval hedge fund-of-funds with RenRe Medici cat bond allocation
In a third interval fund launched under the partnership between alternative asset manager Calamos and specialist alternative investment consultant Aksia insurance-linked securities (ILS) are a component, as the newly launched Calamos Aksia Hedged Strategies Fund (HEDGX) has an allocation to the RenaissanceRe Medici catastrophe bond strategy.
The hedge fund strategy focused interval fund has been launched under the Aksia Calamos Private Markets (AC Private Markets) brand, which seeks to bring institutional alternatives capabilities to investors through evergreen, investor-friendly structures.
The AC Private Markets platform brings together Aksia’s $390+ billion of assets under supervision institutional alternatives platform and Calamos’ $18+ billion liquid alternatives management offering. It has previously launched interval funds focused on private credit and private equity opportunities.
The new HEDGX fund is allocated to strategies that offer low equity beta exposures across relative value, multi-strategy, tactical trading, event driven and long/short equity, and we’ve learned ILS exposure is being included through a catastrophe bond strategy managed by reinsurance firm RenaissanceRe.
HEDGX was formerly a private fund but has now been 40 Act registered and converted into an interval fund structure.
As of August, 3.1% of the funds assets were being allocated to the insurance-linked securities (ILS) asset class.
The overall fund remains small at this time, reported as US $11.3 million as of this week. But interval funds can gain traction relatively quickly, given the wide range of investors that can access them, and diversifying alternative strategies, such as hedge funds, are popular in the currently volatile market environment, so it’s likely to grow over time.
According to disclosures seen by Artemis, the ILS allocation has been made to the RenaissanceRe Medici Fund Ltd., which is reinsurer RenRe’s catastrophe bond focused private fund strategy.
A small allocation for now, at just 3.1% of the $11.3 million HEDGX fund, this is yet another signal of the growing popularity of ILS as a diversifying component of multi-strategy hedge fund focused investment strategies.
Over the last couple of years, cat bonds and some private ILS strategies have increasingly shown up in multi-strategy alternative investment fund filings. We’ve lost count of the number of new fund offerings from major asset managers that have cat bonds, often termed event-linked in fund documents, as one allowable asset class that is within scope for allocation.
At the same time, a growing number of multi-strat hedge fund managers and so-called pod shops are adding expertise in ILS, with catastrophe bonds often the first focus.
Multi-strategy fund capital is therefore a growing component of the cat bond and ILS markets overall asset base, which brings more liquidity and capacity to the cat bond market in particular, at this time.
With more big names in the investment universe showing their liking for ILS it serves to promote the asset class to a growing and increasingly diverse range of investors.
Aksia, of course, is well-known for being a key consultant for the ILS fund market, having had specialist expertise in the asset class for many years.
Finally, it’s also interesting to note the trend for the biggest alternative investment consultants to get closer to the management of fund strategies, through partnerships that leverage their deep expertise in specialist and previously hard to access asset classes.
