CalPERS ramps up cat bond and ILS investments to near $2.5bn valuation at mid-year 2026

CalPERS, the largest public pension fund in the United States, has continued to expand its investments in catastrophe bond and insurance-linked securities fund strategies with the combined valuation of its allocations to the asset class nearing $2.5 billion at the mid-point of 2026, an increase of around 70% just in the first-half of this year.

Recall that, the California Public Employees’ Retirement System, or CalPERS, is one of the largest institutional investors in the world, with total assets under management of around $637 billion reported at the mid-year.

The giant pension fund began allocating to insurance-linked securities during 2025, establishing a range of access points through specialist catastrophe bond and ILS funds that allowed it tap broad sources of reinsurance-linked returns.

In order for this ILS investment sleeve to become more meaningful for the large investors portfolio, those allocations needed to increase and have all been ramping up ever since.

The pension investor has demonstrated its appetite to build-out allocations to source reinsurance related risk-linked returns, which the latest data confirms.

To recap our reporting on CalPERS journey in cat bond and ILS investments so far, back in October 2025 we had reported that CalPERS was set to make its first catastrophe bond allocation and it later became known that the pension fund had made reinsurance related ILS fund investments in 2025 as well.

Then we reported in March 2026, that CalPERS had made allocations during calendar year 2025 with specialist insurance-linked securities investment managers Tangency Capital, Integral ILS and Swiss Re Insurance-Linked Investment Advisors Corporation (SRILIAC).

Disclosures made as of the end of last year showed that CalPERS ILS investments reached a valuation of $1.451 billion as of December 31st 2025, as it continued to allocate to these managers.

Most recently, we reported in June 2026 that the allocations may have risen further, given the commitments allowed for more than that total to be invested, at the time suggesting as much as $1.62 billion could have been invested.

But now, the latest CalPERS documents seen by Artemis show that the level of investment allocation across the three ILS fund access points was actually much higher still, with the total valuation of the ILS investments rising further through the first-half of 2026.

As of June 30th 2026, CalPERS valued the allocations across the Tangency Capital, Integral ILS and Swiss Re Insurance-Linked Strategies fund investments it has made at almost $2.46 billion, a new high.

With that figure now representing a roughly 70% increase in the size of CalPERS investments into the ILS and reinsurance asset class in just the first six months of 2026, based on official data seen by Artemis.

In order of size, the quota share reinsurance focused investment through the Bear Island QS Fund Ltd., managed by specialist Tangency Capital, remains the largest. This allocation stood at a $720 million valuation as of the end of 2025, but by June 30th 2026 it was valued at almost $1.157 billion, as CalPERS continued to grow its allocation to that strategy.

In addition, CalPERS documents show that the Tangency Capital managed quota share reinsurance investment fund it has allocated to delivered a 17.1% total-return over a one year period, the first sight of any performance data from the pension’s ILS investments and perhaps suggesting this strategy was actually the first to receive funding.

Next, the Arctos Cat Island Fund Ltd., a collateralized reinsurance focused investment, so private ILS opportunities, managed by specialist investment firm Integral ILS, which had previously been reported at a $400 million valuation as of the end of 2025. This investment is now valued at almost $759 million as of June 3th 2026, suggesting more has been allocated to it over the first-half of this year.

Finally, the CB Eiger Bear 2025 Fund last year, a catastrophe bond focused investment fund strategy managed by Swiss Re Insurance-Linked Strategies, which had been valued at almost $331 million as of December 31st 2025. This cat bond fund allocation has also grown at a rate that implies additional commitments were made, having been valued at just over $543 million as of June 30th 2026.

All three of these investments have increased in size by at least 60% since the end of 2025, showing additional capital must have been committed to each of them through the first six months of 2026.

It demonstrates CalPERS appetite to make its cat bond, ILS and reinsurance investments a meaningful contributor to its overall total portfolio strategy, needing to have them at a meaningful enough size to make the investments truly worthwhile.

However, even at approaching US $2.5 billion, the ILS fund investments represent only approximately 0.4% of CalPERS massive AUM. Of course, that also means the investor has further room to grow into ILS if it wanted to. A more typical pension fund allocation to ILS investments might be around 1% or more, from our experience.

As a source of diversifying and largely uncorrelated returns, the three access points to insurance-linked returns can only benefit the pension, especially at a time when broader financial markets remain highly volatile and there are numerous factors around geopolitics that make alternative investments incredibly appealing for large investors like this.

CalPERS has developed three distinct access points into the ILS asset class, across quota share reinsurance investments, catastrophe bond investments and private ILS investments (which we suspect are more excess-of-loss reinsurance focused).

The pension investor clearly sees this as a platform it can grow into, to access returns from across the ILS and reinsurance asset class.

It will be interesting to see how that growth continues and whether any additional access points, or strategies, are added over-time.

The California Public Employees’ Retirement System (CalPERS) is just one of the numerous pension fund and major ILS investors we track in our directories here.