Polar Asset raises $215M for Canadian credit risk fund
What's the deal? Polar Asset Management PartnersDealroom has a profile for this one. Try Dealroom → has raised $215 million for a fund focused on Canadian credit risk. The vehicle targets significant risk transfers (SRTs), the instruments banks use to offload loan default risk.
How it works: Banks use SRTs to insure loans against default and free up capital for new business. They sell the risk on bundles of loans to private lenders and hedge funds like Polar, using credit-linked notes or other instruments.
What's in it for investors? In return for taking on that risk, investors receive coupon payments that sometimes exceed 10%.
The signal: SRTs have drawn growing interest from hedge funds and private lenders seeking yield. Polar's raise points to appetite for bank risk-sharing deals in the Canadian market.
Read more: Financial Post
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