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Catastrophe bond funds in the UCITS format saw a strong increase in assets under management in the final quarter of 2023, up 10.5% over the same period, ending the year with approximately $11 billion in assets across the group’s cat bond funds.
Total assets under management (AUM) for the leading UCITS disaster bond funds increased by nearly $1.04 billion in Q4 2023 as fund managers sought to absorb a record amount of new disaster bond issuance over the same period. did.
As the cat bond market reaches new heights in 2023, as detailed in our latest report, the cat bond fund management community is looking to attract new investors to keep up with the busy deal pipeline. We took full advantage of the opportunity to welcome and raise new assets.
This means these cat bond funds ended the year with a record $10.94 billion in total assets under management, just shy of the landmark $11 billion mark. .
This is a very impressive 25% increase in assets for the UCITS Cat Bond Fund sector over the full year of 2023, or an increase of just over $2.16 billion in dollar terms.
Collectively, the UCITS Cat Bond Fund holds more than double the assets under management as of mid-2020.
While growth in 2023 was impressive, it would have absorbed only 10% to 15% of the new issuance that came to market in 2023, a record year.
The popular and growing UCITS cat bond fund division, worth approximately $11 billion, still only holds about a quarter of the cat bonds outstanding, leaving the private fund space and the cat bond market vulnerable. It shows the importance of direct investors.
As of the end of 2023, the three largest UCITS cat bond funds currently have invested nearly $8.5 billion, representing 78% of the group’s total assets under management, with Twelve Capital being the largest UCITS cat bond fund at just over $2.9 is welcoming. a billion.
Interestingly, the three largest UCITS cat bond funds as a group grew slightly slower than the group as a whole through 2023, with total assets under management increasing by 22% over that period compared to the growth of the overall UCITS cat bond funds. Did. Their assets under management will increase by 25%.
Of the three major UCITS cat bond funds, the Twelve Cat Bond Fund grew 36% in 2023, adding approximately $772 million in assets for the year.
Next, the Schroders GAIA Cat Bond Fund, managed by the Schroders Capital ILS team, grew 23%, adding $528 million to end the year with $2.83 billion. Meanwhile, the GAM Star Cat Bond Fund, managed by Fermat Capital Management, grew 9%. An additional $218 million will be added, reaching $2.74 billion by the end of 2023.
However, in percentage terms, the fastest growing UCITS Cat Bond fund in 2023 was the Plenum CAT Bond Dynamic Fund, managed by Plenum Investments, which grew 191% to approximately $142 million in assets. did.
Solidum CAT Bond Fund also had a strong year, increasing 87% to $72.5 million.
Meanwhile, the Leadenhall UCITS ILS fund, managed by Leadenhall Capital Management, grew 82%, adding $275 million to reach $608 million at year-end.
We are currently at an interesting stage in the market’s annual cycle for cat bond fund managers. We had very strong issuance towards the end of the year, driving new funding, then a glut of maturities, and now while the market is recovering. The start of this year seemed very busy, but it’s much slower than it was a few weeks ago.
As a result, we will be watching the assets under management of these UCITS catastrophe bond funds through the first quarter of 2024 to see if the pace of growth continues and, importantly, whether these UCITS catastrophe bond fund managers are able to repurpose their funds. It will be interesting to see if. Turn mature deals back into new investments.
Use this chart to analyze the UCITS Disaster Bond Fund’s assets under management.
You can also use Plenum CAT Bond UCITS Fund Indices to analyze the performance of UCITS Cat Bond funds.
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