Stone Ridge Asset Management, the Recent 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 greater than $5 billion within the last quarter of record.

After 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 overall to $4.72 billion by the tip of July 2024.

Now, as of the newest reporting at October thirty first 2024, the overall for cat bond and ILS assets recorded within the funds has reached almost $5.1 billion and even when we subtract a cross-investment from one fund into one other that Stone Ridge manages, the cat bond and ILS AUM figure within the mutual funds amounted to almost $5.02 billion at October thirty first.

In the newest quarter, Stone Ridge grew the catastrophe bond and ILS assets of those funds by greater than 6%, excluding the cross fund investment (which is just $66m), or almost 8% for those who include it.

Within 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 a powerful over 30%, having sat at $3.86 billion at the tip of October 2023.

The mutual ILS fund range offered by Stone Ridge had shrunk in total net asset terms to as little as roughly $2.6 billion in Q4 2022, but now at greater than $5 billion they’re 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 tip of July 2023, to over $3.31 billion by the tip of October this 12 months.

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

At October thirty first’s $3.31 billion AUM figure, this cat bond fund strategy is now 43% larger than it was a 12 months earlier, as Stone Ridge has capitalised on the strategies strong performance to draw 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 12 months to October thirty first 2024, we understand.

Despite the numerous hurricane activity seen in 2024, Stone Ridge said that, ” generationally-high premiums earned throughout the 12 months and better deductibles for reinsurance contributed to the strong performance for the Fund throughout the fiscal 12 months.”

Moving to the Stone Ridge Reinsurance Risk Premium Interval Fund, that invests across the spectrum of ILS and reinsurance-linked assets with a specific concentrate on sidecars and personal quota shares, in addition to other collateralized reinsurance arrangements and to a lesser degree catastrophe bonds, regular growth has continued.

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

This more reinsurance and quota share focused fund has now increased in net asset terms by almost 7% within the last 12 months.

Stone Ridge Reinsurance Risk Premium Interval Fund delivered its investors a 28.25% return for the 12 months to October thirty first 2024.

On the Interval ILS strategy Stone Ridge said, “The previous few years have seen a high variety of medium-sized catastrophe events, and the reinsurance industry has responded by raising premiums and deductibles. Positive performance was a function of those improved terms and conditions. Despite five landfalling hurricanes within the U.S. throughout the 2024 hurricane season (including major Hurricanes Helene and Milton), the mix of generationally-high premiums earned throughout the 12 months and better deductibles for reinsurance contributed to the strong performance for the Fund throughout the fiscal 12 months as higher premiums outweighed the impact of any natural catastrophe events that caused losses to the Fund throughout the fiscal 12 months.”

As we reported earlier this week, Stone Ridge’s CEO Ross Stevens had provided some color on the performance of the Interval fund, by saying that it had cumulatively returned a powerful 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 roughly $500 million of ILS assets at July thirty first, but continued so as to add to them which has taken the ILS and reinsurance assets on this fund to almost $530 million at October thirty first.

It’s essential to notice 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 thirty first, with catastrophe bonds the biggest component at almost $366 million of direct investments, plus the $66 million investment into the opposite 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 thirty first typically a quieter period for ILS fund inflows, it is going to be interesting to see where these strategies have grown to by the subsequent reporting, which might be as of January thirty first.

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

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