Pioneer Investments, a Boston fund company, has announced the introduction of Pioneer Diversified High Income Trust.
The product is the first U.S. closed-end fund to offer investors exposure to event-linked bonds, which are also known as catastrophe bonds, the company said on Friday.
Catastrophe bonds typically are issued by special-purpose entities created by insurers to spread the risk of losses from low-frequency natural catastrophes such as hurricanes and earthquakes.
Pioneer Diversified High Income Trust invests in catastrophe bonds as part of a diversified portfolio that also includes floating-rate bank loans and global high-yield bonds.
The fund issued 7.3 million common shares at an initial price of $25 per share, producing $182.5 million of assets through an initial public offering managed by UBS Securities LLC.
In addition to the share offering, the fund expects to use financial leverage up to about 33% of gross assets. Based on the shares issued, and assuming leverage at the anticipated level, the fund's assets would reach about $260 million.
Pioneer had $319 billion of assets under management at April 30, of which about $83 billion was managed in the United States.
