As of the end of May, Plenum Investments Ltd. successfully launched the Plenum CAT Bond Dynamic Fund which rounds off our offering in the high-yield market segment. It is a UCITS Fund classified as Article 9 under the Sustainable Finance Disclosure Regulation. Objective of the fund is to achieve an excess return with market-like tail risks.
Dirk Schmelzer, Head Portfolio Manager ILS/CAT Bonds and Partner in Plenum Investments Ltd., comments: ʺInstead of emulating the CAT bond market, we make quality the investment focus by minimizing the share of aggregate CAT bonds exposed to secondary risks, thus strengthening our position versus the market. Despite the resulting restriction of the investment universe, our approach enables us to select items with a high risk compensation and a low correlation to each other.ʺ
David Strasser, Senior Portfolio Manager and responsible for modeling, adds: ʺMaintaining the selectivity in an already limited market segment is only possible through a self-imposed limit of the maximum investment capacity of USD 0.4 billion or 1.5% market share. This is a clear commitment to our clients.ʺ
The investment process of the fund is based on three pillars: maximizing the global diversification of the portfolio, refining the diversification in the US hurricane segment and limiting the risk of high-frequency events. Dirk Schmelzer says: ʺDer Plenum CAT Bond Dynamic Fund is an exclusive investment fund and a quality leap in the high-yield CAT bond fund segment.ʺ
Another reason for launching the Plenum CAT Bond Dynamic Fund is the fact that the risk- oriented investment approach that has been successfully implemented in the Plenum CAT Bond Fund for more than ten years, can also be applied to a higher risk profile. The timing of the fund launch was driven by the reality that investment capacity of CAT Bond UCITS Funds in the high- yield investment segment has been exhausted. CAT Bonds insurance premiums are still attractive and demand for reinsurance coverage is continuing, it can be assumed that the creation of fresh fund capacity will be well absorbed by the market.
The fund has a strong diversification effect in multi-asset portfolios and is well suited as an alternative investment component. Der Plenum CAT Bond Dynamic Fund combines the request of many investors for stably low correlation and attractive returns.
For further information, please contact us at the address below. We look forward to hearing from you.
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