Scandinavia's First Cat Bond Fund Manager Set to Launch in 2014

The first Scandinavian manager of a Cat Bond fund is set to launch in 2014 subject to Entropics Asset Management AB being approved by the Swedish Financial Supervisory Authority (Finansinspektionen). A Cat Bond is collateral that transfers global insurance risks to capital markets. Over the last ten years Cat Bonds as a market has provided investors with an average annual return of 8.7 % with a volatility of 3.2 %*.

Entropics Asset Management AB has filed an application with Swedish Supervisory Authority (”Finansinspektionen”) for discretionary fund management. The management is of an UCITS fund primarily investing in Cat Bonds. If the fund becomes operational, Entropics will be one of the first ten fund managers of a UCITS compliant Cat Bond fund.

Robert Lindblom, being CEO and one of two main founders of Entropics, has a long career in the Swedish insurance and fund industries. Before initiating Entropics, he spent 10 years with Swedish hedge fund manager Brummer & Partners. He was the first CEO and the leading light behind the start of Brummer Life, the life insurance branch of Brummer & Partners.

“The main reason to start Entropics is the need for diversified investment opportunities in the Swedish market”, says Mr. Lindblom. “Still, uncertainties remain about the long term stock market. Low interest rates seem to be more or less permanent. A lot of investors are looking for new asset classes with good risk adjusted return and low correlation with traditional asset classes.”

Entropics intends to manage a fund administered by Swedbank. The planned fund will be oriented towards other funds and direct to institutional and private investors.

“We want to bring Cat Bonds to Swedish investors, many of whom still lack resources and expertise to invest in the Cat Bond market”, explains Mr. Lindblom.

The seven person team behind Entropics has an extensive and proven track record from the insurance and reinsurance industries in Sweden and globally. Dr. Gunnar Roos, co-founder and the chief underwriter of Entropics, has more than 20 years’ experience as actuary and underwriter of reinsurance and tail risk management. Dr. Roos is a partner of insurance consulting firm fmFörsäkringsmatematik.

To form the Entropics investment committee, Dr. Roos and Mr. Lindblom are joined by Mr. Tyrel Jonsson, with extensive experience of claims management including catastrophe claims. The fourth member is Stig Aggevall, a well-known and senior adviser to the Swedish and international insurance industry and partner of fmFörsäkringsmatematik. The fifth member of the committee is meteorologist Martin Hedberg, for many in Sweden known meteorologist, climate adviser and involved in the weather site www.klart.se. He has also for many years explored the connection between extreme weather events and the financial markets.

“It’s a deliberate decision to take an actuarial approach for investment in creating a global insurance portfolio of Cat Bonds”, says Dr. Roos.

Entropics will also emphasize public relations and educational efforts to inform about Cat Bonds in general. This approach is demonstrated by an animated video to explain Cat Bonds, available at en.entropics.se/video-en.

Head of communications, Henrik Sjöholm, has a long career in Swedish politics, as PR consultant and as head of public affairs at the Swedish Federation of Business Owners.

“I am looking forward to work with such a well merited team and the robust infrastructure provided by Swedbank” says Mr. Lindblom.

For further information, please contact Henrik Sjöholm, Head of Communications, +46 760 20 61 84,henrik.sjoholm@entropics.se or visit our webpage at en.entropics.se.

* (The data about return and volatility refers to Swiss Re Cat Bond Total Index for the period Jan 31, 2004 to Jan 31, 2014.)