Plenum lifts cat bond fund beyond $150m

by Artemis on March 16, 2017

Independent Zurich based insurance-linked securities (ILS) and catastrophe bond fund manager Plenum Investments Ltd. has announced that its flagship fund, the Plenum CAT Bond Fund, has now grown its assets to beyond the $150 million level.

While that may not sound like the most assets, in a market characterised by billions these days, Plenum’s cat bond fund has a track record dating back to September 2010, which is longer than many ILS funds in the market can boast.

Size is not everything in ILS and, as a recent survey of institutional investors showed, it is not always the most important element in an allocation being made, with track-record perhaps an equally, or even more, important factor.

Since its inception the Plenum cat bond fund has delivered some investors a return of over 19% (net of fees), which for a relatively low risk and low volatility (just 1.06% over its track record) cat bond fund is solid.

Annualised returns since inception range from 2.76% to over 3.5% per annum, depending on the share class currency of the cat bond fund.

The Plenum fund has seen continuous growth, with a balanced level of investors helping the ILS manager to add incremental capital at times when market issuance is more conducive. The manager also places a great deal of importance on its investor relations, seeking long-term relationships with them.

Dirk Schmelzer, Head of Portfolio Management at Plenum Investments, told Artemis; “We want our clients to understand exactly what they are invested in and what they can expect from us, because we believe that open and transparent communication is the basis on which a trustful relation is build.”

Plenum’s team remains relatively small and focused, but has benefited from stability over the lifespan of its flagship cat bond fund.

“The stability of the team is another critical factor to success. All our employees are highly committed to the firm and the product. There have been no changes to the core team since the launch of the Plenum CAT Bond Fund in September 2010,” Schmelzer explained.

Plenum Investments is looking to build on its long track-record, hoping to attract investors looking for managers with demonstrable records in delivering cat bond linked returns.

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