Disaster bond funds within the UCITS format accelerated their progress within the first-quarter of 2025, with cat bond property beneath administration throughout the now seventeen UCITS cat bond fund methods rising 11% to achieve a brand new record-high of just below $15.3 billion.
UCITS disaster bond funds had been rising strongly final yr, hitting a new high of just over $13.8 billion in cat bond assets under management at December 31st 2024, including a powerful 26% over the course of the twelve-month interval.
With disaster bond issuance beginning off 2025 on record-setting tempo, because of the $7.1 billion of issuance we analysed in our recent cat bond market report, these UCITS format cat bond fund methods have continued to broaden to develop their capital to assist cat bond sponsor wants for reinsurance capital.
Over the course of the first-quarter of 2025, the seventeen UCITS cat bond fund methods added over $1.45 billion in new property beneath administration, with greater than $1 billion of this added in March 2025 alone.
A few of it will have come from coupon earnings, however given the consequences of the wildfires in California additionally dented valuations of uncovered cat bond positions it appears the brand new inflows will by far have been the primary driver of progress.
The primary-quarter of 2025 resulted in a powerful 11% improve in property beneath administration (AUM) throughout the seventeen UCITS disaster bond fund methods, which ended the interval at March thirty first 2025 with a mixed nearly $15.3 billion in cat bond AUM.
Analyse UCITS catastrophe bond fund assets under management using these charts (knowledge kindly shared by our accomplice Plenum Investments AG, a specialist insurance-linked securities (ILS) fund supervisor).
On account of the very sturdy first-quarter of property beneath administration growth, the UCITS disaster bond fund phase has now grown by a big 30% in only one yr.
Which is an acceleration of tempo, for the reason that progress over full-year 2024 of 26%.
This was assisted by the launch of a brand new UCITS cat bond fund technique in March 2025, as the awaited RenaissanceRe Medici UCITS Fund began its operations with an initial $340 million of capital.
Alongside which, nearly all of different UCITS cat bond funds have additionally continued to develop in Q1 2025, serving to to drive the brand new record-high AUM throughout the UCITS phase.
The massive three UCITS cat bond funds now account for two-thirds of property throughout the group, with $10.04 billion throughout them.
Because of this, the three largest UCITS cat bond funds now contribute 66% of the entire AUM for the phase on the finish of Q1 2025, which is barely down from 68% on the finish of 2024, which means that whereas the phase is rising the share of the most important three funds has been declining considerably given the expansion seen at so many different cat bond fund methods.
If we add within the Leadenhall UCITS ILS Fund, UCITS cat bond fund methods with greater than $1 billion in AUM made up nearly $11.2 billion of the entire, the Leadenhall Capital Companions fund having grown over 5% within the quarter to achieve greater than $1.15 billion.
The Schroder GAIA Cat Bond Fund ended the Q1 2025 interval as the most important of the UCITS cat bond funds, with simply over $3.8 billion of property.
Subsequent is the Twelve Cat Bond Fund at nearly $3.66 billion, adopted by the GAM Star Cat Bond Fund at nearly $2.57 billion.
The highest two, the UCITS cat bond methods from Schroders and Twelve Securis, each grew their AUM by greater than 9% every within the first-quarter of 2025, however the GAM Star technique shrank barely.
Essentially the most vital AUM progress in Q1 2025 got here from the Icosa Cat Bond Fund, which added 33% to achieve $425 million by the tip of March.
Subsequent quickest in progress phrases was the AXA IM Wave Cat Bond Fund, which grew by over 30% to achieve nearly $328 million within the interval.
Of the others rising by 10% or extra: The Plenum CAT Bond Defensive Fund grew by nearly 18% to achieve $480 million; the Solidum CAT Bond Fund grew 13% to $103 million; the HSZ Group Maneki UCITS Cat Bond Fund grew 12% to $63 million; the Plenum CAT Bond Dynamic Fund grew 11% to $247 million; and the Franklin K2 Cat Bond Ucits Fund technique grew 10% to nearly $158 million.
Relying on the way you measure disaster bond threat capital excellent, utilizing our measure of $52.2 billion on the finish of Q1 2025, at nearly $15.3 billion in mixed property the group of UCITS cat bond funds made up greater than 29% of excellent cat bond market capital as of the tip the first-quarter (you can analyse Artemis’ measure of this here).
That signifies a slight outpacing of general cat bond market progress for these UCITS cat bond funds, as on the finish of 2024 the group contributed 28% of the entire threat capital within the disaster bond market.
With a mixed practically $15.3 billion in disaster bond property beneath administration throughout the UCITS cat bond fund methods on the finish of March 2025, this group have now grown by 30% in a single yr, however by a powerful 63% in two years and 76% in simply three years.
Theses UCITS cat bond fund methods have continued to broaden their significance to the disaster bond market, making up an rising proportion of the general marketplaces property and rising as a share of insurance-linked securities (ILS) capital general.
Because of this, the UCITS cat bond funds are a rising contributor to third-party investor backed reinsurance capability general, which has been welcomed by insurance coverage and reinsurance corporations as they proceed to look to the disaster bond as an environment friendly supply of reinsurance from the capital markets.
The catastrophe bond market pipeline is already constructing for the second-quarter of 2025 and the cat bond market yield stays at a traditionally excessive stage, which ought to proceed to draw each sponsors and traders, offering alternatives for cat bond fund managers to draw new inflows and proceed to develop.
Analyse UCITS catastrophe bond fund assets under management using our charts here.
You can even analyse UCITS cat bond fund performance, using the Plenum CAT Bond UCITS Fund Indices.
