Cat bond fund news

RenaissanceRe, the Bermuda based reinsurance company and third-party capital manager, has reported raising almost $238 million in additional third-party capital from investors for some of its ILS structures in time for the 1/1 renewal season, while over the course of 2024 investors benefited from strong earnings from joint-ventures and ILS funds.

The Los Angeles, California wildfires have had a minimal effect on the Plenum CAT Bond UCITS Fund Indices, as the write-downs in value of exposed positions for the sector manifest largely in reduced gains being made, although resulting in a very slight decline for the Index representing the lower-risk cohort of catastrophe bond funds.

Analysts at Fitch Ratings have said that any realised catastrophe bond losses from the Los Angeles wildfires are expected to be small, however these are not anticipated to impede cat bond market issuance.

A definitive prospectus has now been filed with the SEC for the Brookmont Catastrophic Bond ETF, a new exchange traded fund strategy that will be predominantly focused on the catastrophe bond and insurance-linked securities (ILS) asset class.

Amundi US Investment Management has reported that its Pioneer CAT Bond Fund strategy delivered a 14.27% return in the year to October 31st 2024, while assets under management in the strategy have continued to expand through the end of the year.

Fermat Capital Management, the specialist manager of catastrophe bond and insurance-linked securities (ILS) investments, has launched a new range of commingled ILS strategies already supporting around $2 billion in assets, as well as two key hires to its global investor relations team.

Stone Ridge Asset Management, the New York based alternative risk premia focused investment manager, appears to have taken the strongest action in terms of marking down its mutual catastrophe bond and insurance-linked securities (ILS) funds on potential exposure to the California wildfires, while most other strategies in the market have barely moved.

Catastrophe bond funds in the UCITS format continued their strong growth through the end of last year, reaching a new high of just over $13.8 billion in cat bond assets under management, which represents very impressive 26% growth through 2024.

High-demand for catastrophe bond investments has compressed risk spreads somewhat, resulting in the overall yield of the catastrophe bond market falling back into single digits at 9.94% by the end of December 2024, according to the latest data from Plenum Investments.

Catastrophe bond fund strategies in the UCITS format have averaged a 13.62% return for full-year 2024, according to the latest data from the Plenum CAT Bond UCITS Fund Indices.