Stone Ridge Asset Management, the New York based alternative risk premia focused investment manager, has reported that the insurance-linked securities (ILS) assets under management in its mutual reinsurance fund strategies increased to almost $5.3 billion in the last quarter of record, with catastrophe bonds seemingly growing in focus.
In the next quarter, to April 30th 2025, Stone Ridge Asset Management has reported a further increase in cat bond and ILS assets to just shy of $5.3 billion, with again catastrophe bond allocations leading the way.
It’s worth noting that total cat bond, reinsurance and ILS net assets reported across the Stone Ridge mutual investment funds are actually reported at just over $5.313 billion, but there remains a cross-investment from one multi-asset class fund strategy into the more cat bond focused fund that Stone Ridge manages.
Notably though, that cross-investment has declined meaningfully in size, with fresh catastrophe bond investments filling out more in the multi-asset fund strategy.
As a result, the trend for slightly more allocations to catastrophe bonds has continued, with Stone Ridge seemingly finding these assets attractive at this time, possibly for their returns, but also likely for the liquidity options they offer an investment manager.
At almost $5.3 billion, across the last twelve-months, the cat bond, ILS and reinsurance sidecar related investment assets held in Stone Ridge’s mutual reinsurance funds has now increased by roughly 20%, having sat at around $4.4 billion at the end of April 2024.
The most catastrophe bond focused of the mutual fund strategies, the Stone Ridge High Yield Reinsurance Risk Premium Fund, had net assets of $3.48 billion at January 31st 2025, which has now increased to $3.53 billion at April 30th and we understand has increased further since to $3.56 billion at this time, thanks to the high-levels of market activity seen.
This Stone Ridge cat bond fund strategy had grown by 23% over the previous twelve months to April 30th 2025.
The Stone Ridge Reinsurance Risk Premium Interval Fund, that invests across the spectrum of ILS and reinsurance-linked assets with a greater focus on sidecars and private quota shares, as well as other collateralized reinsurance arrangements. and to a lesser degree catastrophe bonds, has grown a little further in the last quarter of record.
Stone Ridge’s interval ILS strategy had net assets of $1.12 billion as of January 31st 2025, but this has now increased slightly to $1.16 billion as of April 30th.
Some of the positions in this fund, especially reinsurance sidecar stakes, still appear slightly down in valuation terms due to the California wildfires, which is to be expected given the way Stone Ridge allocates to the global reinsurance market for this strategy and the levels of risk it assumes.
The third mutual investment fund strategy that Stone Ridge allocates to catastrophe bonds, ILS and reinsurance with, is the Stone Ridge Diversified Alternatives Fund, a multi-strategy fund that began adding ILS investments to its portfolio in 2023.
The ILS and reinsurance asset components of this fund grew to just over $601 million at January 31st 2025 which included a $113 million cross-investment into the cat bond focused Stone Ridge High Yield Reinsurance Risk Premium Fund, but by April 30th sat at a higher almost $624 million.
However, that cross-investment into the more cat bond focused fund strategy has shrunk meaningfully, to just $17.8 million at April 30th, so the direct investments into cat bonds, ILS and reinsurance this multi-strat fund makes have increased considerably, with the growth almost all coming from cat bonds.
Direct cat bond investments made by the Stone Ridge Diversified Alternatives Fund reached over $507 million at April 30th 2025, up from almost $386 million at the end of January.
Which shows Stone Ridge Asset Management has taken advantage of still attractive cat bond returns and the high-levels of cat bond market issuance, to build-out direct investments into the cat bond asset class for its diversified multi-asset mutual fund strategy this year.
At over $10 billion, Stone Ridge remains one of the largest investment manager of ILS and reinsurance assets, in AUM terms, featured in Artemis’ directory of insurance-linked securities (ILS) fund managers.
