UCITS catastrophe bond fund AUM rises 18% to near $10.4bn in H1 2023

Reflecting very strong market activity in the first-half, catastrophe bond funds in the UCITS format saw their combined assets under management (AUM) rise by over 18%, to reach a new record-high of nearly $10.4 billion by the end of June 2023.

This is the first time the combined assets of the UCITS catastrophe bond funds has surpassed $10 billion, reaching a new landmark size for these cat bond fund structures that now make up roughly one-quarter of the outstanding cat bond market.

The last time we reported on UCITS cat bond fund assets under management, at the end of May, the total AUM of the group stood at a new high of almost $9.8 billion.

Earlier this year, by the end of the first-quarter, the total AUM of the UCITS cat bond fund strategies stood at $9.37 billion.

Growth in the overall assets under management (AuM) of the main UCITS catastrophe bond funds has continued, with another billion dollars of flows helping to further bulk up these strategies in the second-quarter of 2023.

While now over $1.6 billion in assets has been added to the total over the first six months of this year.

June was a particularly strong month, with the combined AUM of the group of UCITS cat bond fund strategies increasing by 6.4%, or almost $622 million.

The chart below shows UCITS cat bond fund AUM up to the end of June 2023. Click on the chart to view an interactive version.

The UCITS cat bond fund market expanded by an impressive over 6% in just one month through June 2023, with clear evidence of new assets being raised to support sponsors reinsurance and service the busy market pipeline.

By the end of June 2023 the three largest UCITS cat bond funds continued to dominate assets under management, with a combined $8.12 billion between them.

The Fermat Capital Management managed GAM Star Cat Bond Fund remains the largest UCITS strategy at $2.85 billion, while the Twelve Capital Cat Bond Fund experienced strong growth in June to reach $2.75 billion, and the Schroder GAIA Cat Bond Fund closed out the half at almost $2.52 billion.

For growth in assets in percentage terms for the first-half of 2023, it was the Plenum Investments CAT Bond Dynamic Fund that grew the fastest, adding almost 110% in the period.

The Solidum Cat Bond Fund grew its assets by nearly 100%, while the Leadenhall UCITS ILS Fund grew by almost 48% year-to-date.

Of the largest UCITS cat bond funds, Twelve Capital’s strategy added almost 29% during the year, while the Fermat Capital GAM Star fund grew 13% and Schroder Capital’s GAIA cat bond strategy expanded by over 9% in the first six months of 2023.

While the growth in percentage terms was higher for some of the smaller and mid-sized UCITS cat bond funds, the largest three funds maintained their 78% share of UCITS cat bond fund assets.

Recall that we previously reported that UCITS cat bond fund strategies delivered an impressive average return of 8.2% for the first-half of 2023.

Such performance, for a six month period, can only help to attract more investors and capital to the space, so if the issuance pipeline continues at a similar pace we expect further expansion of this group’s assets under management over the rest of the year.

We look forward to watching how the assets under management of the leading UCITS catastrophe bond funds develop over the second-half of the year.

With the market anticipating another busy period of issuance in the fourth-quarter, it will be interesting to see how much of that is captured by these cat bond fund strategies.

Analyse UCITS catastrophe bond fund assets under management using our charts here.

You can also analyse UCITS cat bond fund performance, using the Plenum CAT Bond UCITS Fund Indices.