MembersCap launches cat bond fund, was sole investor behind innovative cat / cyber ILW

Members Capital Management Limited (MembersCap) executives told us the company has recently launched its first catastrophe bond fund strategy to expand its offering to clients, while also disclosing that it was the investor behind a recent innovative industry-loss warranty (ILW) transaction.

Members Capital Management (MembersCap) launched in 2024 as a Bermuda-regulated insurance-linked securities and reinsurance investment manager with a specific focus on bringing the asset class to a wider audience leveraging digital ledger technology.

MembersCap then completed the investment of its initial reinsurance portfolio through its MCM Fund I back in July 2025, with that strategy becoming the first tokenised, institutional-grade reinsurance investment fund, designed to open new capital channels to both digital asset investors and traditional allocators.

Now, some 14 months into the track-record for that first private reinsurance, or private ILS focused strategy, MembersCap has recognised an opportunity to expand its offering to clients with something offering investors an alternative to its private reinsurance focused ILS fund.

MembersCap has launched the MCM Fund II, a professional Class A Bermuda fund strategy that invests in 144A catastrophe bonds, seeking to satisfy the needs of investors that have a desire for greater liquidity in their reinsurance investments.

Dr Ben Fox, Co‑Founder & Chief Investment Officer of MembersCap told Artemis, “This summer we launched a new catastrophe bond strategy — a liquid, actively‑managed portfolio of 144A cat bonds that sits alongside our private reinsurance fund.

“Together they let investors own reinsurance risk across the full liquidity spectrum, from daily‑dealing cat bonds through to privately‑originated, collateralised deals.”

Fox further explained that with MembersCap targeting both the more traditional kinds of institutional investors that allocate to ILS and also digital asset investors, launching a more liquid option made sense.

“Our investors value reinsurance for its lack of correlation to their other holdings — including bitcoin and other cryptocurrencies — but many digital‑asset allocators are strongly drawn to the liquidity that cat bonds offer,” Fox told us.

“That appetite is what prompted the launch, and we’ve seen it reflected in inflows across both strategies at mid‑year.”

Our discussion with MembersCap was right after the Monte Carlo Rendez-vous and Patrick Barrett, Co‑Founder & Chief Executive Officer of the company, noted that interest in its differentiated strategy and approach remains strong.

Barrett told us, “The interest from the digital‑asset community in what we’re building has been striking, and it’s showing up in fresh capital. There’s a new generation of allocators looking for real‑world assets with genuine, uncorrelated returns, and reinsurance is among the most compelling answers.

“We see this as the early stage of a much larger shift in how reinsurance capital is raised and deployed.”

Fox added, “As Monte Carlo recedes into the rear‑view mirror, we reflect on a successful first year of capital raising and deployment, delivering returns in line with investor expectations. But we’re not resting on our laurels — we’re working diligently on several initiatives to keep improving access to reinsurance returns for digital‑asset allocators.”

MembersCap has been busy and Fox disclosed that one initiative recently executed on, was being the sole investor behind a recent innovative industry-loss warranty (ILW) transaction.

We recently reported on an industry-loss warranty (ILW) that broker Lockton Re said was believed to be the first ever ILW that combines property catastrophe and cyber risk triggers within a single limit structure for a protection buying client.

It turns out that MembersCap was the sole capital provider to that combined property cat and cyber single limit ILW transaction, which serves to demonstrate the investment manager’s ability to execute on complex transactions for cedents, securing unique opportunities for its investors in the process.

Fox explained, “We’re an innovative organisation by design, and there’s no clearer example of that than the capital we deployed behind the market’s first industry‑loss warranty to combine property‑catastrophe and cyber triggers in a single limit.

“We were delighted to be at the forefront of bringing novel, efficient and effective capacity to our cedants, while delivering our investors access to sources of risk premium they couldn’t otherwise reach.”

Launching a catastrophe bond fund and providing capital to this novel ILW transaction both demonstrate MembersCap’s desire to be responsive to client needs and to innovate.

Now with a track-record of 14-months behind its private reinsurance focused ILS fund, which is the first tokenised institutional-grade reinsurance investment fund, the investment manager has shown that its differentiated approach is working and has gained broad market acceptance, providing a platform for future growth.