RBC Subsidiary Launches Reinsurance Fund
The SEC declared the registration statement effective for The City National Rochdale Select Strategies Fund（CNRLX ) on June 22, 2017. CNRLX is seeking to raise up to $500 million. This reinsurance fund focuses on insurance linked securities(ILS) and reinsurance space, and is structured as an interval fund.
CNRLX will focus on reinsurance investments providing exposure to insurance risk of natural catastrophes such as hurricanes and earthquakes. The fund will invest primarily invest in structured reinsurance investments such as equity linked notes, preferred shares, or special purpose vehicles. Notably, the fund will get most of its exposure through structured investments issued by separate accounts of Iris Reinsurance Ltd, a Bermuda Class 3 insurer. Finally, most of these investments will be short term and seasonal.
Artemis, a news , analysis and data media service dedicated to the risk transfer, and insurance linked securities space, has covered the development of this reinsurance fund, along with its peers.
According to Artemis the US retail investor base has shown “keen liking” for the returns of reinsurance and insurance linked securities(ILS). Hence its no coincidence that the Stone Ridge Trust interval Funds, have been highly successful at raising capital. More asset managers will probably enter this space with new funds in the coming years.
RBC as Manager
City National Rochdale LLC, a wholly owned subsidiary of Royal Bank of Canada, will manage the fund. In addition, the management fee will be relatively low at 0.50% of net assets.
SEI Investments Distribution Co. is the Fund’s distributor. The Fund is offering one class of shares through the RIA channel. There will be no up front fees or commissions. Furthermore, minimum initial investment is $1,000,000 per RIA or intermediary.
For more information on fund launches, see Public Listings Update.