Key Takeaways
- • Polar Asset Management announced the second close of Polar CRS Fund-1 with US$300 million in total commitments, a dedicated vehicle for significant risk transfer (SRT) transactions.
- • The fund is open to qualified institutional investors seeking exposure to SRT deals with banks in Canada and globally.
- • Polar says it has funded approximately US$1 billion of SRT transactions over eight years through its flagship multi-strategy fund.
- • The fund is likely to be the first in a series of drawdown vehicles as the SRT market grows in Canada and globally, according to the firm.
- • Polar managed US$6.4 billion across four primary offerings as of April 30, 2024.
Summary
Toronto-based Polar Asset Management Partners Inc. announced the second close of Polar CRS Fund-1 with US$300 million in total commitments, according to a Business Wire release dated May 15, 2024. The fund gives qualified institutional investors the ability to participate in significant risk transfer transactions with banks in Canada and globally. SRT transactions, also known as credit risk sharing or Reg Cap transactions, give financial institutions regulatory capital benefits and/or internal risk limit relief, making them an important tool for bank balance sheet optimization.
The release argues that SRT transactions allow investors to access banks' origination platforms and underwriting strengths at an attractive risk/return profile. Canadian banks have recently increased their activity in the global SRT market, which Polar sees as an opportunity for investors. The firm expects secular trends to support the volume of Canadian transactions as banks and financial institutions seek greater balance sheet capacity.
Polar says it has long been a leader in Canadian SRT transactions through its flagship multi-strategy fund, which has funded approximately US$1 billion of SRT transactions over eight years. Polar CRS Fund-1 is likely to be the first in a series of drawdown vehicles as the market grows. Greg Lemaich, President and Chief Operating Officer, said the firm has built internal credit underwriting expertise and relationships with issuing banks in Canada, the UK and Europe, which are critical to originating transactions that earn attractive risk-adjusted returns for clients.
Polar, founded in 1991, is a global alternative asset manager focused on niche-oriented strategies. As of April 30, 2024, it managed US$6.4 billion across four primary offerings: the flagship Polar Multi-Strategy Fund, the Polar Long/Short Fund, the Polar Micro-Cap Fund and Polar CRS Fund-1.
The release argues that SRT transactions allow investors to access banks' origination platforms and underwriting strengths at an attractive risk/return profile. Canadian banks have recently increased their activity in the global SRT market, which Polar sees as an opportunity for investors. The firm expects secular trends to support the volume of Canadian transactions as banks and financial institutions seek greater balance sheet capacity.
Polar says it has long been a leader in Canadian SRT transactions through its flagship multi-strategy fund, which has funded approximately US$1 billion of SRT transactions over eight years. Polar CRS Fund-1 is likely to be the first in a series of drawdown vehicles as the market grows. Greg Lemaich, President and Chief Operating Officer, said the firm has built internal credit underwriting expertise and relationships with issuing banks in Canada, the UK and Europe, which are critical to originating transactions that earn attractive risk-adjusted returns for clients.
Polar, founded in 1991, is a global alternative asset manager focused on niche-oriented strategies. As of April 30, 2024, it managed US$6.4 billion across four primary offerings: the flagship Polar Multi-Strategy Fund, the Polar Long/Short Fund, the Polar Micro-Cap Fund and Polar CRS Fund-1.
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