Stone Ridge grows mutual ILS funds 24%, cat bond strategy hits $2.1bn - Artemis.bm

Stone Ridge Asset Management's mutual insurance-linked securities (ILS) funds have demonstrated a strong return to growth, with a 24% increase in ILS assets in the last quarter. The cat bond focused strategy has reached a new high of $2.1 billion in assets under management (AUM). This article explores the impressive performance of Stone Ridge's ILS fund strategies and the factors contributing to their success.

Strong Growth for Stone Ridge Mutual ILS Funds

Stone Ridge Asset Management's mutual insurance-linked securities (ILS) funds experience a significant increase in assets.

Stone Ridge Asset Management's mutual insurance-linked securities (ILS) funds have demonstrated a remarkable return to growth, adding 24% in ILS assets in the last quarter. This impressive performance highlights the strong demand for Stone Ridge's ILS fund strategies.

The cat bond focused strategy, in particular, has reached a new high of $2.1 billion in assets under management (AUM), signaling the growing popularity of this investment approach. With such substantial growth, Stone Ridge has firmly established itself as a leading provider of ILS funds.

Recovery of the Interval ILS Fund

Stone Ridge's interval ILS fund shows signs of recovery after a period of contraction.

Stone Ridge's interval ILS fund, which primarily invests in reinsurance sidecars, private collateralized reinsurance, and private quota share arrangements, has experienced a slight return to growth. This recovery comes after a period of shrinkage caused by losses and changes in investor preferences.

The stabilizing performance of the interval ILS fund indicates that investor outflows are slowing down and losses are being settled. This trend, coupled with the attractive returns available in reinsurance assets, positions the fund for potential stable growth in the future.

Expanding ILS Assets in Diversified Alternative Fund

Stone Ridge's diversified alternative fund sees an increase in ILS assets.

The Stone Ridge Diversified Alternatives Fund, previously devoid of catastrophe bonds or ILS assets, has witnessed significant growth in its ILS component. From $250 million in ILS assets in April 2023, the fund's ILS assets have now increased to $330 million as of July 2023.

This expansion demonstrates Stone Ridge's commitment to diversifying its alternative investment offerings and sourcing insurance and reinsurance-linked returns for its clients. The inclusion of ILS assets in the fund's portfolio adds further opportunities for attractive risk-adjusted returns.

Investor Appetite for Catastrophe Bonds

Stone Ridge's cat bond-focused fund experiences a surge in assets.

Stone Ridge's cat bond-focused mutual ILS fund, the Stone Ridge High Yield Reinsurance Risk Premium Fund, has reached a new milestone, surpassing $2 billion in assets for the first time. This impressive growth, with assets increasing by approximately 26% from April to July 2023, highlights the strong investor appetite for catastrophe bonds.

Catastrophe bonds provide an attractive investment opportunity, offering diversification and potential high yields. Stone Ridge's success in this area further solidifies its position as a leading player in the insurance-linked securities market.

Conclusion

Stone Ridge Asset Management's mutual insurance-linked securities (ILS) funds have demonstrated strong growth in the last quarter, with a significant increase in assets. The cat bond-focused strategy has reached a new high of $2.1 billion in assets under management (AUM), while the interval ILS fund shows signs of recovery. Stone Ridge's commitment to diversification is evident in the expansion of ILS assets in its diversified alternative fund. The investor appetite for catastrophe bonds is also evident in the surge in assets for the cat bond-focused fund. Stone Ridge's success in the ILS market positions it as a leading provider of reinsurance capital.

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