Blackstone Different Asset Administration, the hedge fund options unit of Blackstone, has made the primary direct disaster bond funding for one in every of its flagship muti-strat options funds lately.
The Blackstone Different Multi-Technique Fund is among the agency’s multi-asset class centered methods that has integrated parts of insurance-linked securities (ILS) and reinsurance linked investments for various years.
Blackstone has been bringing ILS and direct reinsurance returns to the buyers in its multi-strategy funds for a very long time, with allocations to the sector altering over time.
One space of focus has been to speculate right into a flagship technique managed by specialist Aeolus Capital Administration, with allocations made to vintages of the Aeolus Property Disaster Keystone fund since no less than 2019.
In 2025, it seems the Blackstone Different Multi-Technique Fund has maintained its allocations to the Aeolus Capital Administration disaster reinsurance centered technique, knowledge seen by Artemis suggests.
At December thirty first 2024, the Blackstone Different Multi-Technique Fund counted a simply over $14 million allocation throughout three sleeves of the Aeolus Property Disaster Keystone fund that it had allotted to.
Knowledge disclosing the multi-strat options fund portfolio as of March thirty first 2025 now reveals the identical variety of Aeolus allocations valued at a barely increased simply over $14.5 million.
The portfolio disclosure additionally means that an allocation made by the fund to the PIMCO ILS Fund technique just a few years in the past has now run-off fully.
This PIMCO ILS fund allocation, a disaster bond technique, was made in two investments and at one time valued at over $35 million on the finish of 2022. However with PIMCO having shuttered its devoted ILS fund methods two years in the past, the allocation had shrunk in worth to $2.26 million as of December thirty first 2024, however within the newest disclosure is just not reported in any respect so has presumably run its course.
It’s value remembering that this Blackstone Different Multi-Technique Fund additionally has specialist ILS funding supervisor Nephila Capital listed as a sub-advisor, though on the final disclosure no allocation to any Nephila technique was evident.
Extra curiously although, the Blackstone multi-strat options fund has made its first direct funding right into a disaster bond in 2025, we imagine.
Trying again by way of earlier portfolio disclosures from the previous few years we’ve got not discovered another direct cat bond investments made by this fund.
However, the most recent reveals that an funding was made within the first-quarter of this 12 months into one in every of insurer SafePoint’s Nature Coast Re cat bonds.
We imagine this funding has been made into the Nature Coast Re Ltd. (Sequence 2025-2) cat bond, given the CUSIP listed within the Blackstone fund’s portfolio disclosure.
The Blackstone Different Multi-Technique Fund values its funding into the Nature Coast Re cat bond at simply $250,000.
So it’s a small preliminary direct cat bond funding for the fund, however may very well be an indication of extra to return.
The fund’s prospectus permits disaster bonds as one sort of fastened earnings safety that it will possibly allocate to. However, as we stated, we haven’t seen any direct cat bond investments made by this Blackstone fund earlier than.
Having beforehand had an allocation to a disaster bond fund managed by PIMCO, this maybe alerts Blackstone nonetheless has an urge for food to include returns from these ILS buildings throughout the fund, however now sees a possibility to take action immediately.
This comes at a time when an rising variety of multi-strategy funding and hedge funds are allocating in rising quantities to the disaster bond asset class.
With Blackstone having over $3.7 billion of property on this one multi-strat options fund, but additionally various different multi-strategy funds that might additionally allocate to devices resembling cat bonds, will probably be attention-grabbing to see if this new direct cat bond funding technique grows for the supervisor over time.
Lastly, it’s value noting that the portfolio disclosure is prolonged and filings will not be at all times simple to parse, so we may have missed others particularly if the naming of sure property within the disclosure has not used typical conventions.
