Plenum Investments grows European Insurance Bond Fund to more than €200m

Plenum Investments AG, the Swiss based specialist manager of catastrophe bond and insurance-linked securities (ILS) funds, has experienced substantial growth in assets raised for its Plenum European Insurance Bond Fund, a UCITS investment strategy focused on the debt issuances of European insurers.

As readers may recall, Plenum launched the fund in 2021 with over €20 million in assets. The UCITS fund strategy provides daily liquidity to investors and invests in subordinated bonds issued by European insurers and reinsurers, with a particular focus on Restricted Tier 1 (RT1) instruments.

Plenum notes that the fund is designed for investors that are seeking to strengthen the resilience of their portfolios within the high-yield segment.

According to the firm, the fund offers a way to improve the risk-return profile of bond investments with an average BBB rating. As of year-to-date performance has exceeded 6%.

Roughly this time last year, Plenum’s European Insurance Bond Fund had exceeded €100 million.

Now a year later, and with more than €200 million of assets under management, the strategy has clearly  become a key component of Plenum’s growing catastrophe bond, ILS and reinsurance focused investing platform.

Rötger Franz, Lead Portfolio Manager, commented: “Investors in subordinated bonds of European insurers are looking for ‘high yielding, but not high yield.’ This combines attractive returns with the lowest default risk among corporate bonds.

Franz added: “The niche nature of the market also allows investors to achieve excess returns compared to traditional corporate bonds, capturing a structural premium. The RT1 market is still developing and remains under the radar for most investors.”

Daniel Grieger, CIO and Co-Portfolio Manager, said: “We see growing interest among institutional investors for subordinated bonds of European insurers. It doesn’t always have to be bank subordinated debt or funds with a heavy focus on banks.

Griege continued: “Defaults of insurance companies are extremely rare – since the introduction of Solvency II in 2016, there has not been a single default in our liquid investment universe. This results in highly reliable cash flows that benefit investors. The Plenum European Insurance Bond Fund is therefore an ideal complement to any portfolio.”