UCITS cat bond funds add $200m to AuM in January, near $9bn as a group

Catastrophe bonds in the UCITS format have continued to add assets under management (AuM) at the start of 2023, with a further almost $200 million gain in January, taking the combined assets of those cat bond funds tracked to almost $9 billion.

The overall assets under management (AuM) of the main UCITS catastrophe bond funds has been rising in recent months, partly as valuations recovered after loss estimates for hurricane Ian proved over-blown in some cases, as well as thanks to some fresh inflows from investors.

In January 2023 those two factors are again at play, helping to elevate the combined assets under management across the 15 UCITS cat bond funds currently tracked to $8.97 billion, a new all-time high.

Click the image below for an interactive version, where you can also see a month-by-month chart.

These UCITS cat bond funds have now grown, in AuM terms, for three consecutive months.

However, the combined AuM of these UCITS cat bond funds is really only around $270 million higher than it was a year ago, as the effects of spread widening wiped out significant value through the second and third-quarter, while hurricane Ian knocked roughly $500 million of the total in September and October.

October 2022 saw the total UCITS cat bond fund AuM fall to $7.92 billion, so the recovery since has been significant.

Now, over $1 billion of value has been recovered since Ian exposed positions bounced-back, and added through some new, albeit not particularly significant, investor inflows as well.

It’s challenging to know just how much of the near increase in AuM since October has come through the rebounding valuations of cat bonds since Ian, but we suspect it makes up a relatively significant share, with inflows a smaller component.

You can see this dramatic recovery in our chart of UCITS cat bond fund AuM by month below, click the image for the interactive version.

The Schroder GAIA Cat Bond Fund added the most in AuM in January 2023, at almost $90 million, followed by the Fermat Capital managed GAM Star Cat Bond Fund at almost $46 million, and the Twelve Capital Cat Bond Fund at $44 million.

The GAM Star Cat Bond Fund remains the largest of the UCITS cohort, at almost $2.57 billion, followed by the Schroder GAIA Cat Bond Fund at $2.39 billion and the Twelve Cat Bond Fund at nearly $2.19 billion.

These three largest UCITS cat bond funds currently make up almost 80% of the total AuM tracked here.

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.