Disaster bond funds within the UCITS format noticed their mixed belongings beneath administration develop to $12.2 billion by the top of the first-half of 2024, rising 4% within the second-quarter and 11% within the first-half. Impressively, as a share of the excellent cat bond market, these UCITS fund methods now make up 25% of threat capital.
In reality, during the last decade UCITS cat bond funds have grown their share of the cat bond market considerably, doubling it from simply 12% again at year-end 2015, to now present the capital to help simply over one quarter of the cat bond market’s excellent issuance.
The $12.2 billion of belongings units one other report AUM excessive for the UCITS cat bond fund sector, which has been rising strongly and offering an rising share of threat capital to help the excellent market over the previous few years.
The three largest UCITS cat bond funds present over $8.6 billion of the full, so round 71% of UCITS cat bond capital, whereas an extra 13 cat bond funds make up the remainder.
Analyse UCITS catastrophe bond fund assets under management using our charts here.
The remainder of the excellent cat bond market, the remaining three-quarters, consists of different registered or non-public managed cat bond fund methods, multi-asset managers that add cat bonds to their diversified fastened earnings or different funds, and direct institutional buyers.
The biggest UCITS cat bond fund on the finish of June 2024 was the Schroder GAIA Cat Bond Fund technique, rising 14$ over H1 to succeed in greater than $3.28 billion.
The Twelve Cat Bond Fund is subsequent, ending June at $2.91 billion, the the GAM Star Cat Bond Fund at $2.41 billion.
Throughout the first-half of 2024, the only UCITS cat bond fund technique that added probably the most in belongings was Fermat Capital Management’s own-branded UCITS cat bond fund strategy that launched this year.
Nonetheless, whereas that technique grew from a standing begin in February to $625 million by the top of June, the GAM Star Cat Bond Fund that Fermat is portfolio supervisor to shrank by $329 million.
Notably, Leadenhall Capital Companions UCITS ILS Fund technique added over $283 million in belongings to develop by 46% to just about $896 million within the first-half of this yr.
The Icosa Cat Bond Fund that launched this yr grew from zero to $163 million by June thirtieth.
Additionally notable, the Credit score Suisse (Lux) Cat Bond Fund grew by 212%, including nearly $73 million in belongings this yr, whereas Plenum’s CAT Bond Dynamic Fund grew 24% to $175 million in 2024 to this point.
The actual fact UCITS cat bond funds make up 25% of the market, primarily based on Artemis’ measure of excellent 144A and personal cat bonds, for the primary time is critical and exhibits how vital this fund construction has turn out to be within the house.
Which makes it much more vital that the insurance-linked securities (ILS) business responds to ESMA’s call for evidence, regarding UCITS eligible assets, with the time limit for responses to be submitted approaching.
As we reported yesterday, UCITS cat bond funds as a group delivered an average return performance of 4.72% for the first-half of 2024.
With the catastrophe bond market pipeline now set to be quieter by the wind season, however the cat bond market yield remaining at a traditionally excessive stage, we anticipate additional AUM progress for the group of UCITS cat bond funds as soon as major issuance restarts in direction of the fourth-quarter of the yr.
Analyse UCITS catastrophe bond fund assets under management using our charts here.
You may also analyse UCITS cat bond fund performance, using the Plenum CAT Bond UCITS Fund Indices.
