Ambassador mutual catastrophe bond fund growth continues, hitting $329.1m
The Ambassador US mutual catastrophe bond fund strategy operated by advisor Embassy Asset Management has continued to attract inflows from investors through the Atlantic hurricane season, reaching more than $329 million in assets under management (AUM) this month.
The Ambassador cat bond fund was launched in the third-quarter of 2021 by investment advisor Embassy, which has a focus on non-correlated strategies that deliver income to its clients.
With a dedicated catastrophe bond and insurance-linked securities (ILS) investment focus, Embassy was the newest entrant to the US mutual ILS fund marketplace.
The strategy began allocating capital to catastrophe bonds in the quarter to April 30th of 2023, while also renewing its first private ILW arrangement. After which, the Ambassador Fund benefited from more inflows to its catastrophe bond focused strategy around the end of last year, which continued into 2024 as well.
When we last covered the cat bond fund back in April, the Ambassador Fund had around $191 million in net assets under management.
As well as catastrophe bonds, the fund had started to also invest in a number of private ILS arrangements, which were industry loss warranties (ILW) under a structure named Consulate Re.
2024 has been a successful period of capital raising for the Ambassador cat bond fund strategy.
As of January 31st, the Ambassador Fund had reached almost $164 million in total net assets, which then grew to $191 million by the end of February, to $226 million by the end of April, and then almost $272 million by the end of July 2024, which was the latest quarterly reporting.
But, since then inflows of investor capital have continued and the Ambassador Fund has reached over $329 million of assets as of early October 2024.
The Ambassador cat bond fund has more than doubled in size in less than one-year, having stood at almost $128 million at the end of October 2023.
In the last reporting period, to July 31st 2024, the Ambassador fund made three more private insurance-linked securities (ILS) investments, Consulate Re 2024-6A, Consulate Re 2024-7A and Consulate Re 2024-8A, presumably three more transformed and securitized industry-loss warranties (ILW) arrangements.
Preferred notes from the Consulate Re ILW program made up more than 14% of the Ambassador Fund portfolio at the end of July, amounting to almost $38.8 million in assets.
Catastrophe bonds made up the rest of the portfolio, at almost $240 million by the end of July.
The Consulate Re private investments into ILW’s is a good way for the Ambassador portfolio management team to source additional investments, then transforming them to a structure suited to a mutual ILS fund strategy.
Total net assets of the Ambassador Fund reached almost $272 million as of the end of July 2024.
But further growth has been seen since that July reporting, with total net assets reaching just over $329 million at the end of September 2024.
We’ve learned that the returns of the Ambassador cat bond fund have continued to be attractive, with a double-digit year-to-date total return and a rolling 1-year return of 13.38% as of September 30th 2024.
As we’ve been reporting recently, the fund has marked its net asset value in the wake of recent hurricane Milton, but only stood -0.87% down at October 18th since before that storm made landfall, a figure that will have been absorbed within less than one month of recent performance.
