Catastrophe bond funds within the UCITS format skilled important progress in property beneath administration within the last quarter of 2023, rising by 10.5% that interval, to finish the 12 months with almost $11 billion of property throughout this group of cat bond funds.
The mixed property beneath administration (AUM) of the principle UCITS disaster bond funds elevated by almost $1.04 billion through the fourth-quarter of 2023, as fund managers appeared to soak up the report ranges of recent disaster bond issuance within the interval.
As the cat bond market reached new heights in 2023, as detailed in our latest report, the cat bond fund administration neighborhood maximised their alternative to convey onboard new traders and lift new property to satisfy the busy pipeline of offers head on.
It meant the mixed AUM of those cat bond funds ended the 12 months at a record-high of $10.94 billion, so simply shy of the $11 billion landmark determine.
That represents a really spectacular 25% progress in property throughout the full-year 2023 for the UCITS cat bond fund sector, or simply over $2.16 billion progress in greenback phrases.
UCITS cat bond funds as a bunch now command greater than double the quantity of property that they had beneath their administration as not too long ago because the mid-year of 2020.
While the expansion in 2023 has been spectacular, this may solely have absorbed solely between 10% and 15% of the brand new issuance that got here to market within the report 12 months 2023.
At almost $11 billion, the favored and rising UCITS cat bond fund sector nonetheless solely holds round one-quarter of the excellent inventory of cat bonds, exhibiting the significance of the personal fund house and likewise direct traders within the cat bond market.
At the top of 2023, the three largest UCITS cat bond funds now contribute 78%, or almost $8.5 billion of the whole property beneath administration throughout the group, with Twelve Capital ending the 12 months with the most important UCITS cat bond fund, at simply over $2.9 billion.
Interestingly, the three largest UCITS cat bond funds as a bunch have truly grown a bit of slower than the general group throughout the course of 2023, with their mixed AUM rising 22% over the interval, in comparison with the entire cohort of UCITS cat bond funds rising their AUM by 25%.
Of the three main UCITS cat bond funds, the Twelve Cat Bond Fund grew by 36% in 2023, including almost $772 million in property throughout the 12 months.
Next, was the Schroder GAIA Cat Bond Fund, managed by the Schroder Capital ILS crew, which grew 23%, including $528 million to succeed in $2.83 billion at year-end, whereas the GAM Star Cat Bond Fund managed by Fermat Capital Management grew 9% and added $218 million to succeed in $2.74 billion at year-end 2023.
However, in share phrases, the quickest rising UCITS cat bond fund of 2023 was the Plenum CAT Bond Dynamic Fund, managed by Plenum Investments, which added 191% to succeed in almost $142 million in property.
The Solidum CAT Bond Fund additionally noticed a powerful 12 months, rising 87% to succeed in $72.5 million.
While, the Leadenhall Capital Management operated Leadenhall UCITS ILS Fund grew by 82%, including $275 million, to succeed in $608 million at year-end.
We are at present in an attention-grabbing part of the market annual cycle for cat bond fund managers, as we’ve had very sturdy issuance via the top of the 12 months, driving new capital elevating, then a glut of maturities, and now whereas the market has began the 12 months trying fairly busy, it’s far slower than only a few weeks again.
As a outcome, it is going to be fascinating to look at the property beneath administration of those UCITS disaster bond funds via the first-quarter of 2024, to see whether or not the tempo of progress continues and importantly whether or not these UCITS cat bond fund managers can recycle their capital from maturing offers again into new investments.
Analyse UCITS disaster bond fund property beneath administration utilizing our charts right here.
You also can analyse UCITS cat bond fund efficiency, utilizing the Plenum CAT Bond UCITS Fund Indices.
