Disaster bond funds within the UCITS format continued their sturdy progress via the top of final 12 months, reaching a brand new excessive of simply over $13.8 billion in cat bond belongings beneath administration, which represents very spectacular 26% progress via 2024.
Within the last quarter of 2024, these UCITS structured disaster bond funding funds added virtually $800 million to their mixed belongings beneath administration (AUM).
Given the sturdy circulation of maturities and likewise some traders taking income, there was some fluctuation within the interval, which you’ll be able to see in the lower of our charts on this page tracking UCITS cat bond fund AUM by month.
However, a really sturdy December noticed the overall UCITS cat bond fund AUM rise by over $633 million in only one month, as cat bond fund managers welcomed new flows to fulfill the busy main issuance pipeline.
Which helped the UCITS cat bond section attain a brand new excessive, of simply over $13.8 billion in mixed AUM throughout the group of 16 funds by the top of 2024.
Analyse UCITS catastrophe bond fund assets under management using these charts (knowledge kindly shared by our companion Plenum Investments AG, a specialist insurance-linked securities (ILS) fund supervisor).
Given the sturdy continued improve in AUM, these UCITS insurance-linked securities (ILS) funding fund methods have elevated their share of total excellent cat bond market threat capital as soon as once more.
Relying in your measure of present cat bond threat capital excellent, the UCITS cat bond funds made up roughly 28% of excellent cat bond market capital as of the top of 2024 (you can analyse Artemis’ measure of this here).
Which signifies continued progress of cat bond market share in UCITS funds, as once we final reported in early November these funds were 27% of the market.
The three largest UCITS cat bond funds proceed to dominate belongings beneath administration within the sector.
On the finish of the third-quarter of 2024, the three largest UCITS cat bond funds present virtually $9.26 billion of the overall AUM, so round 71% of UCITS cat bond capital.
Nevertheless, whereas the three largest UCITS cat bond funds grew additional to $9.41 billion in mixed AUM by the top of the 12 months, the share share declined barely to 68%.
On the finish of 2024, the Schroder GAIA Cat Bond Fund technique remained the biggest with virtually $3.49 billion in cat bond AUM and this fund grew 23% within the 12 months.
The Twelve Cat Bond Fund is the subsequent largest of the UCITS cat bond methods, ending December 2024 at $3.35 billion for 15% progress within the 12 months, adopted by the GAM Star Cat Bond Fund at $2.57 billion which shrank 6%.
However, keep in mind that Fermat Capital Administration, the supervisor of the GAM Star Cat Bond Fund, additionally launched its own-branded UCITS technique which grew from launch to $751 million by the top of the 12 months.
There have been different UCITS cat bond funds with very sturdy progress within the 12 months, notably the Leadenhall UCITS ILS Fund added 79% to succeed in $1.01 billion, the primary time this technique has ever surpassed the billion greenback stage.
Of the $100 million plus in dimension UCITS cat bond funds, different notable growers over the course of 2024, have been the Plenum CAT Bond Dynamic Fund at 57%, Tenax ILS UCITS Fund at 47%, AXA IM WAVe Cat Bonds Fund at 35%, and Securis Disaster Bond Fund at 32%.
Of the smaller funds, the Credit score Suisse (Lux) Cat Bond Fund added 188% in belongings over 2024, whereas the HSZ Group Maneki cat bond fund added 70% and Solidum CAT Bond Fund 26%.
With disaster bond market issuance exercise persevering with apace within the first-quarter of 2025 (see the new deal pipeline here), and maturities set to speed up (see the upcoming cat bond maturity schedule here), the disaster bond funding group seems set to have a busy begin to the brand new 12 months.
The issuance pipeline will have to be particularly strong and people maturity flows will want recycling if these UCITS cat bond funds are to proceed their progress surge via the first-half.
However with insurance coverage and reinsurance firm urge for food for cover in securitized 144A disaster bond kind remaining excessive, whereas deal execution and pricing are enticing for sponsors, and on the similar time UCITS cat bond funds delivered investors another strong year of returns, there appears each likelihood these cat bond funds proceed to increase as we transfer via 2025.
The catastrophe bond market pipeline already signifies a busy 12 months forward and the cat bond market yield stays at a traditionally excessive stage, which ought to proceed to draw traders and supply alternatives for cat bond fund managers to draw new inflows.
Analyse UCITS catastrophe bond fund assets under management using our charts here.
You can too analyse UCITS cat bond fund performance, using the Plenum CAT Bond UCITS Fund Indices.
