UCITS catastrophe bond fund sector grew 24% to new $17.12bn high in H1 2025

Catastrophe bond funds structured in the UCITS format continued to rapidly expand through the second-quarter of 2025, with the sector as a whole having grown its combined cat bond assets under management by an impressive 24%, or over $3.31 billion, just since the end of last year.

UCITS catastrophe bond funds had experienced strong growth in 2024, hitting a new high of just over $13.8 billion in cat bond assets under management at December 31st 2024, representing 26% growth in combined AUM over the course of that twelve-month period.

With the catastrophe bond market breaking all issuance records so far in 2025, as detailed in our latest quarterly report and this more recent article on another landmark data point, the pace of growth in the UCITS cat bond fund sector accelerated, to keep up with provision of capital to support this market activity.

By the end of the first-quarter of 2025, the UCITS cat bond sector’s combined assets under management had jumped a further 11%, adding $1.45 billion more in capital across the seventeen UCITS catastrophe bond fund strategies tracked.

But that has been eclipsed by growth in the second-quarter of 2025 for the UCITS cat bond fund sector, as the combined assets across the seventeen funds jumped a further 12%, adding almost $1.83 billion in AUM in the last three month period.

Analyse UCITS catastrophe bond fund assets under management using these charts (data kindly shared by our partner Plenum Investments AG, a specialist insurance-linked securities (ILS) fund manager).

We believe this to be the fastest three month period of growth for UCITS cat bond fund assets ever and already this important market segment has added more in AUM over the first-half of 2025, at $3.31 billion, than it has ever managed in a full calendar year.

If we look back to June 30th 2024, the combined assets under management of the UCITS cat bond funds has now increased by a stunning 40% in 12-months, or over $4.91 billion in dollar terms, in just one year.

Of course this growth of the UCITS cat bond fund sector has come at a time of accelerating issuance of catastrophe bonds, with the outstanding cat bond marketplace having now grown by 18% over the year to June 30th 2025.

Which means the UCITS cat bond funds have far outpaced the market’s growth, as the funds in the sector have grown in number and commanded increasing amounts of its assets.

Back at the end of Q1 2025, using Artemis’ measure for the outstanding cat bond market these UCITS funds accounted for more than 29% of cat bond risk capital at that time.

Now, as of the end of Q2 2025, again using our measure for the market size, the UCITS cat bond fund sector accounts for just over 30% of outstanding cat bond risk capital at this time.

Which shows that the UCITS funds have expanded their share of the market and this is evident in the growth achieved by some of the UCITS cat bond fund strategies over the first-half of this year.

Fastest growing in 2025 is the Fermat UCITS Cat Bond Fund strategy, which as we reported recently has exceeded $2 billion in assets and this Fermat Capital Management operated fund increased its assets by 168% in 2025 alone.

The next most significant AUM growth in H1 2025 came from the Icosa Cat Bond Fund, which added 77% to reach just over $566 million at the end of June.

The Plenum Cat Bond Dynamic Fund has grown by almost 60% in AUM terms, to hit $356 million at the end of June 2025. Plenum Investment’s longer-standing Cat Bond Defensive Fund also grew by 31% to reach $532 million in assets.

AXA Investment Managers’ AXA IM Wave cat bond fund has increased its AUM by almost 50% to reach $375 million at the mid-year point of 2025.

While the Leadenhall UCITS ILS Fund has grown by 42% to reach a new high of $1.55 billion and notably the first time this Leadenhall Capital Management operated UCITS cat bond strategy has exceeded the $1.5 billion mark.

Another notable grower, in percentage terms, was the Franklin Templeton managed Franklin K2 Cat Bond UCITS Fund which grew 40% to reach almost $200 million.

However, at the top of the UCITS cat bond fund list in AUM terms, the Twelve Securis managed Twelve Cat Bond Fund has grown 25% to reach almost $4.2 billion by June 30th, an addition of $838 million in assets since the start of the year.

As we reported, the Twelve Cat Bond Fund became the first UCITS strategy to exceed $4 billion in June this year.

The Schroder GAIA Cat Bond Fund stands as the second-largest UCITS cat bond strategy still, with its more than $3.88 billion of assets having increased by over 11% in 2025 alone.

The one outlier is the much reported on GAM Star Cat Bond Fund, which shrank by 32% over the first-half of 2025, to end June with just over $1.74 billion of assets.

It’s worth also noting that the first-half of this year saw the launch of the RenaissanceRe Medici UCITS Fund, which began its operations with an initial $340 million of capital.

Overall, it is largely a story of growth so far this year. As the investment managers of UCITS cat bond funds responded and raised ample new capital to satisfy the growing appetite of sponsors for reinsurance solutions in securitized cat bond form.

The catastrophe bond market pipeline is now taking its traditional summer break, but we’re told could open earlier and with more deals than previous years. Meanwhile the cat bond market yield remains at a historically attractive level and these combined should continue to attract both sponsors and investors, providing opportunities for cat bond fund managers to attract new inflows and continue their growth.

The recent ESMA viewpoint has raised some uncertainty around use of the UCITS fund structure in delivering pure cat bond investment strategies. While insurance-linked securities (ILS) managers and investors we’ve spoken with remain cautious and in planning mode, they do not seem overly concerned so far. With the general feeling being that alternative fund structures will suit the vast majority of investors allocated to cat bonds in the UCITS space.

However, those developments in Europe will continue to be watched and we’re sure contingency plans are already being made by managers as they consider their options, awaiting any European Commission (EC) decision on the future for the UCITS fund structure.

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.