Deutsche Bank Readies $100M Insurance-Linked Hedge Fund

Jun 6 2013 | 11:30am ET

Deutsche Bank is planning a catastrophe-bond hedge fund, in spite of the difficulties it faces in doing so due to new U.S. regulations.

The bank's Deutsche Asset & Wealth Management unit will run the new fund, with new re-hire Michael Amori as manager. Amori, who is based in London, was co-head of Deutsche Bank's longevity markets group until leaving the bank late last year.

The new fund will invest in cat-bonds and other insurance-linked investments, Hedge Fund Alert reports. Deustche Bank, which has yet to begin marketing the fund, plans to seed it with US$100 million, in spite of the restrictions placed on it by the Volcker rule, which strictly limits the amount that banks can invest in hedge funds.

When it launches the fund, Deutsche Bank will leap into an increasingly crowded field, both in terms of players and opportunities. A half-dozen firms have held cat-bond offerings in the past two months, and Citigroup spin-off Napier Park Global Capital is preparing to join the likes of Credit Suisse, Fermat Capital and Nephila Advisors in the space.

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