25 July 2018Analysis

HSBC launches US Treasury fund targeted at captive, reinsurance and ILS investors

HSBC Global Asset Management (Bermuda), manager of HSBC Corporate Money Funds (HCMF), has introduced its first offshore US Treasury fund domiciled in Bermuda, targeted at institutional investors from the re/insurance, captive and ILS market locally.

The fund will offer additional scale to investors by investing directly into a master HSBC global treasury liquidity fund.

HSBC said the aim is to provide investors with security of capital and daily liquidity, together with an investment return which is comparable to normal, short-dated US dollar denominated US Treasury returns.

The fund seeks to achieve this through investing in a mix of short-term debt, including Treasury bills, bond, and repo.

“Our investment process combines a structured, methodical and globally consistent approach including a distinctive credit, liquidity and interest rate risk approval and limit setting process, adhering to global governance standards, whilst taking into account local market dynamics,” said Faith Outerbridge, head of HSBC Global Asset Management (Bermuda).

Outerbridge continued: “Oversight of the investment process is provided by the Global Liquidity Investment Committee, the Regional Liquidity Investment Committee and Global Liquidity Credit Committee taking account of liquidity fund guidelines, credit process and portfolio construction.

“We have seen appetite for an offshore USD Treasury fund grow amongst our Bermuda based clients and are proud Bermuda has become the impetus to launch this fund solution to HSBC clients globally."

Mark Watkinson, CEO of HSBC Bank Bermuda, added: “The launch of the new US Treasury Fund speaks to HSBC’s global breadth of capabilities and network our clients can rely on. We have been working closely with our colleagues in Europe as well as the US to continue to offer the best solutions possible in an everchanging regulatory environment. This fund is evidence of the benefits of an asset management product, the US Treasury Fund, linking directly to the banking systems by offering the convenience of a sweep facility for our institutional clients.”