Amundi US cat bond fund hits $426m, takes dedicated ILS fund AUM to $1.1bn

Investment manager Amundi US has continued to attract capital to its most recently launched dedicated insurance-linked securities (ILS) fund strategy, as the Pioneer CAT Bond Fund has now reached $426 million in assets, now roughly tripling in size over the course of 2024 so far.

This success in raising capital for the investment manager’s first dedicated catastrophe bond fund strategy has helped Amundi US’ dedicated mutual ILS fund assets reach a combined $1.1 billion, across the Pioneer CAT Bond Fund and its longer standing interval fund strategy.

Amundi US launched the dedicated cat bond mutual fund, the Pioneer CAT Bond Fund, in the first-half of 2023.

The Pioneer CAT Bond Fund reached $84.2 million in assets by the end of October 2023, delivering its investors an 11.20% net asset value (NAV) return from launch to that time.

The cat bond fund strategy surpassed $150 million in assets at its one year anniversary in late January 2024, then grew further to $218 million by the end of February 2024, later reaching $338 million by early July this year and then just over $358 million at the end of July 2024.

Impressively, given the Atlantic hurricane season has been underway since that last data point, Amundi US has increased the assets under management of its catastrophe bond fund to $426 million as of this week.

It’s reflective of the strong investor appetite being seen for cat bond strategies and that this extends into the US mutual fund marketplace.

Underscoring this strong investor appetite, as we reported last week, Stone Ridge has also experienced strong growth of its most cat bond focused strategy, with this fund now reaching $3.25 billion and so sitting among the largest in the marketplace at this time.

Returns remain strong and a 12.03% at NAV is reported year-to-date by some mutual fund tracking services, which is seemingly very attractive for the cat bond fund sector.

Amundi US’ longer-standing dedicated mutual ILS fund strategy that allocates to a range of reinsurance instruments, the Pioneer ILS Interval Fund, continued to grow in the last quarter of record.

Previously, this interval ILS fund strategy had grown to roughly $1 billion in assets right back in 2021, but then shrank over a number of years as losses from the soft market period flowed through the ILS industry.

Having fallen to $626 million in assets at the end of January 2024, the Pioneer ILS Interval Fund grew back to almost $651 million by the end of April this year.

Now, in the last quarter of record to July 31st, the Pioneer ILS Interval Fund strategy has reached over $671.7 million in assets, so growth has continued although some of this will simply be earnings as well.

The Pioneer ILS Interval Fund allocates its capital to quota share reinsurance arrangements, reinsurance sidecars and private collateralized reinsurance in the main. It now seems much better positioned to attract new capital for the year-end renewal deployments, having stabilised and returned to growth now over two consecutive quarters.

In addition, given the continued strong growth being seen and strong returns evidenced, we expect that Amundi US’ Pioneer CAT Bond Fund stands especially well-positioned to grow more over the rest of this year, once the cat bond issuance pipeline reopens.

It’s worth also noting that Amundi US has continued to add more in the way of ILS assets to its multi-strategy fund range in recent months as well, meaning its overall ILS AUM is much higher than the combined mutual ILS fund AUM that has now reached $1.1 billion.