Stone Ridge Asset Management, the New York based alternative risk premia focused investment manager, grew the catastrophe bond and insurance-linked securities (ILS) assets under management in its range of mutual reinsurance fund strategies to more than $5 billion in the last quarter of record.

When we last reported on the investment managers 40’s Act compatible mutual cat bond, ILS and reinsurance fund range, around $300 million in assets had been added to lift the total to $4.72 billion by the end of July 2024.

Bạn đang xem: Stone Ridge mutual cat bond and ILS fund assets surpassed $5bn at October 31

Now, as of the latest reporting at October 31st 2024, the total for cat bond and ILS assets recorded in the funds has reached almost $5.1 billion and even if we subtract a cross-investment from one fund into another that Stone Ridge manages, the cat bond and ILS AUM figure in the mutual funds amounted to almost $5.02 billion at October 31st.

In the latest quarter, Stone Ridge grew the catastrophe bond and ILS assets of these funds by more than 6%, excluding the cross fund investment (which is just $66m), or almost 8% if you include it.

In the last twelve-months, the cat bond, ILS and reinsurance sidecar related assets under management held in Stone Ridge’s mutual reinsurance funds has increased by an impressive over 30%, having sat at $3.86 billion at the end of October 2023.

The mutual ILS fund range offered by Stone Ridge had shrunk in total net asset terms to as low as roughly $2.6 billion in Q4 2022, but now at more than $5 billion they are back at a level not seen since early 2020.

Stone Ridge has continued to have success in raising funds for its most catastrophe bond focused Stone Ridge High Yield Reinsurance Risk Premium Fund strategy.

This cat bond focused fund saw its AUM grow from $3.08 billion at the end of July 2023, to over $3.31 billion by the end of October this year.

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We understand that flows have continued, as too have coupon earnings of course, which has helped to lift the cat bond focused Stone Ridge High Yield Reinsurance Risk Premium Fund to $3.46 billion by November 30th 2024, on which basis the total mutual ILS fund AUM is now around $5.2 billion (although likely higher given the other funds have probably grown further as well).

At October 31st’s $3.31 billion AUM figure, this cat bond fund strategy is now 43% bigger than it was a year earlier, as Stone Ridge has capitalised on the strategies strong performance to attract more investor capital to it.

Finally on the catastrophe bond strategy, the Class I shares of the Stone Ridge High Yield Reinsurance Risk Premium Fund delivered investors a 15.48% return over the year to October 31st 2024, we understand.

Despite the significant hurricane activity seen in 2024, Stone Ridge said that, ” generationally-high premiums earned during the year and higher deductibles for reinsurance contributed to the strong performance for the Fund during the fiscal year.”

Moving to the Stone Ridge Reinsurance Risk Premium Interval Fund, that invests across the spectrum of ILS and reinsurance-linked assets with a particular focus on sidecars and private quota shares, as well as other collateralized reinsurance arrangements and to a lesser degree catastrophe bonds, steady growth has continued.

Stone Ridge’s interval ILS strategy had assets of $1.14 billion by the end of July 2024, which has increased further to $1.24 billion by October 31st.

This more reinsurance and quota share focused fund has now increased in net asset terms by almost 7% in the last year.

Stone Ridge Reinsurance Risk Premium Interval Fund delivered its investors a 28.25% return for the year to October 31st 2024.

On the Interval ILS strategy Stone Ridge said, “The last few years have seen a high number of medium-sized catastrophe events, and the reinsurance industry has responded by raising premiums and deductibles. Positive performance was a function of these improved terms and conditions. Despite five landfalling hurricanes in the U.S. during the 2024 hurricane season (including major Hurricanes Helene and Milton), the combination of generationally-high premiums earned during the year and higher deductibles for reinsurance contributed to the strong performance for the Fund during the fiscal year as higher premiums outweighed the impact of any natural catastrophe events that caused losses to the Fund during the fiscal year.”

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As we reported earlier this week, Stone Ridge’s CEO Ross Stevens had provided some colour on the performance of the Interval fund, by saying that it had cumulatively returned an impressive 92% in two years.

The third mutual fund strategy that Stone Ridge allocates to catastrophe bonds, ILS and reinsurance from is its Stone Ridge Diversified Alternatives Fund, which is a multi-strategy fund that began adding ILS investments to its portfolio in 2023.

This multi-asset strategy had reached approximately $500 million of ILS assets at July 31st, but continued to add to them which has taken the ILS and reinsurance assets in this fund to almost $530 million at October 31st.

It’s important to note though, that the Diversified Alternatives fund strategy makes a $66 million investment into Stone Ridge’s cat bond focused strategy, which is where the cross-investment we mentioned earlier comes from.

Finally, Stone Ridge’s Diversified Alternatives fund has grown overall, meaning that the ILS related component fell from 40% of the fund’s assets, to now 37% as of October 31st, with catastrophe bonds the largest component at almost $366 million of direct investments, plus the $66 million investment into the other Stone Ridge High Yield Reinsurance fund.

Now back at over $5 billion in cat bond, ILS and reinsurance assets under management across these three mutual fund strategies, Stone Ridge has continued to see fund-raising success, it seems.

With the quarter to October 31st typically a quieter period for ILS fund inflows, it will be interesting to see where these strategies have grown to by the next reporting, which will be as of January 31st.

Also read our article on Stone Ridge CEO’s 2024 letter to investors.

At over $10 billion, Stone Ridge remains the largest investment manager of ILS and reinsurance assets, in AUM terms, featured in Artemis’ directory of insurance-linked securities (ILS) fund managers.