Following its entry into the insurance-linked securities (ILS) space through its partnership with Cedar Trace Group, Sage Advisory Services is looking to expand its range of investment solutions.The company aims to offer investors new sources of return with low correlation to traditional capital markets and business cycles.In June, we reported that .The collaboration will primarily focus on investment products that combine insurance-linked securities with credit opportunities.

According to Greg Cobb, the firm’s Director of Insurance Solutions who was writing in a recent thought-leadership piece, Sage Advisory’s move into the ILS space is seen as a natural extension of its evolution from a core fixed-income manager into “core plus” strategies developed in response to client needs.“Most recently, we launched direct access to the high-yield market via the delivery of our “high-quality highyield” approach, portfolios of individual securities in the higher-rated categories of the high yield space,” he said.“The addition of ILS is simply a logical and further extension into the world of “core plus-plus.” He continued: “As an asset allocator via our multi-asset portfolios (actively managed portfolios of global ETFs across multiple asset classes), we will now be able to deliver an additional diversifying risk premium — the under researched, undervalued, and underinvested (re)insurance risk premium.

“The insurance industry represents our largest corporate line of business with an exceptional exposure to the offshore world of alternative risk and international reinsurance, the primary dwelling of the ILS industry.It is a world in which we are well traveled, well-versed, and very comfortable.” Cobb also stresses that the ILS space and the capture of the re/insurance risk premium is a “natural complement” to a core competency at Sage – “identifying and capitalizing on opportunities across the global credit markets.” Cobb went on to explain that this strategy will be implemented through The Lares Funds, a new series of private funds designed for varying risk and liquidity profiles.The new funds are invested across public credit, catastrophe bonds, and private ILS, managed jointly by Sage and Cedar Trace Capital.

“In concert, we will be seeking to deliver an attractive stream of returns that are lightly correlated to the capital markets and corresponding business, credit, and policy cycles.As such, the approach will serve to enhance portfolio diversification and promote greater resilience,” Cobb concluded..All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance can be accessed online.

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