Swiss Re Insurance-Linked Fund Management

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Plenum cat bond fund approved for distribution in Germany and Austria

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Plenum Investments, an investment manager with a focus on alternatives such as insurance-linked securities and catastrophe bonds, have recently been expanding the geographic reach of their flagship ILS investment fund the Plenum CAT Bond Fund.

The UCITS III mutual fund aims to offer a broadly diversified investment opportunity in catastrophe bonds and insurance-linked securities and promises returns of Libor + 4%.

The fund was approved for public distribution in Germany on the 25th July, it was also approved for distribution in Austria at the end of June. This expansion gives Plenum a much larger audience of potential investors for their funds, however we suspect they’ll find it hard to expand the size of the fund too significantly right now given the slow primary cat bond market. This will however put Plenum in a good position to capitalise on new issuances and grow the overall size of the fund.

“CAT bonds are ideal for portfolio optimization. On the one hand, they generally achieve a significant excess return over traditional bond portfolios with lower volatility. On the other hand, CAT Bonds are largely immune to  interest rate and credit risks. In view of the current market situation, CAT bonds are therefore a very attractive alternative”, said Dr. Rainer Gruenig, CEO Plenum Investments AG.

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