Cat bond funds hit record $21bn

The UCITS catastrophe bond fund sector has reached $21 billion in assets for the first time, reflecting steady growth despite a slower expansion rate this year.

Assets under management totaled nearly $21.06 billion last week, rising from $19.2 billion at the end of 2025. The $1.84 billion increase in 2026 represents nearly 10% growth, though the pace has eased compared to last year’s 39% jump.

This growth continues even as catastrophe bond maturities and early redemptions reached record levels in 2026. Assets briefly fell to $19.8 billion at the end of the first quarter but recovered in the second quarter as fund managers secured new capital to support issuance.

By June, assets had climbed to $20.76 billion, with the trend continuing into July. The UCITS structure, which enables European retail and institutional investors to access catastrophe bonds, now represents just over 32% of the global market, up from 31% at the start of the year.

Since the end of 2022, sector assets have grown by 140%, with a 92% rise since the close of 2023. The past 18 months alone saw a 53% increase, fueled by record catastrophe bond issuance.

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Leadenhall Capital Partners’ Leadenhall UCITS ILS Fund has been the fastest-growing fund in dollar terms this year. It added $524 million, bringing its total to nearly $2.52 billion—almost a billion more than a year ago.

Other strong performers include the GAM Swiss Re Cat Bond Fund, which grew by $409 million to nearly $1.97 billion. Fermat Capital Management’s UCITS strategy increased by $366 million, reaching $2.9 billion. The Icosa Cat Bond Fund added $278 million, totaling $1.143 billion, while Plenum Investments’ Plenum CAT Bond Dynamic Fund grew by $138 million to $650 million.

The two largest UCITS cat bond funds have both been in soft closes, with the Twelve Securis managed Twelve Cat Bond Fund still the largest in this sector at almost $4.62 billion and only growing very slightly this year, while the Schroders Capit

The sector’s expansion mirrors broader trends in the catastrophe bond market, where demand for reinsurance and retrocession capacity has driven record issuance. While the 10% growth in 2026 appears modest next to last year’s surge, it comes after a high starting point. With fewer maturities expected in the second half and strong issuance projected, the sector may regain momentum before year-end.

This milestone highlights how UCITS funds are becoming a key source of risk capital for the global catastrophe bond market. They connect investors with the reinsurance needs of insurers and other sponsors.