Plenum Investments, the specialist manager of catastrophe bond and other reinsurance-linked assets, has announced that its two flagship CAT bond funds have achieved significant milestones, reaching a total combined volume of over $1.1 billion.
As per the announcement, the Plenum CAT Bond Dynamic Fund has surpassed $500 million, while the Plenum CAT Bond Defensive Fund has exceeded $600 million. Both funds are public UCITS funds and are dedicated solely to investing in catastrophe bonds.
As Plenum explains, the goal of the Plenum CAT Bond Dynamic Fund is to secure an excess return with a level of risk comparable to the market, whereas the Plenum CAT Bond Defensive Fund aims to achieve a target return of money market +350 basis points.
At June 30 2023, the cat bond fund assets amounted to $780 million. Now, exceeding $1.1 billion, this illustrates the significant growth of the assets over the past two years.
Plenum’s CAT Bond Dynamic fund has grown particularly quickly, having only stood at just over $200 million of assets under management (AUM) in November 2024.
It’s also worth noting that Plenum Investments’ firm-wide AUM are now close to $2 billion, with that milestone also now in sight and likely to be surpassed soon.
Dirk Schmelzer, Head of Portfolio Management ILS/CAT Bonds and Partner at Plenum Investments AG, commented: “The great success of our CAT bond funds has several reasons. First, we are the only providers in the UCITS CAT bond market with two clearly differentiated risk profiles to meet the different risk preferences of investors. Second, investors increasingly recognize that the fund volume relative to the market size and the specific nature of the market are key success factors.
“Our commitment to superior risk selection quality is highly appreciated in the market – along with the strong performance over the past three years and the attractiveness of CAT bonds compared to traditional fixed-income investments.”
David Strasser, Senior Portfolio Manager, who is responsible for risk modeling, said: “We focus on risk-oriented return optimization and invest specifically in granular, largely independent risks, particularly in the U.S. wind segment.
“We consistently reduce exposures to secondary hazards and aggregating loss structures. This enables us to achieve high diversification and select positions with attractive risk compensation and low correlation, despite a limited investment universe.”
Plenum added: “Both funds have a strong diversification effect for multi-asset portfolios and are suitable as fixed-income proxies or as an alternative investment component. Given the attractive premium levels, increased search for yield, and heightened geopolitical and trade policy risks, we expect the growth of the CAT bond market to continue.”
Plenum Investments is just one of the specialist managers of cat bond and ILS fund managers listed in our Insurance Linked Securities (ILS) Investment Managers & Funds Directory.
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