The Hedge Fund Bet Luring Retail Investors to High-Risk Debt (1)

There was a time when investing in <-bsp-bb-link state="{"bbHref":"bbg://news/topics/CAT","_id":"00000190-48be-d497-a7fb-ecbf907c0000","_type":"0000016b-944a-dc2b-ab6b-d57ba1cc0000"}">catastrophe bonds was the preserve of hedge funds and other sophisticated alternative asset managers. But after underpinning the best hedge fund strategy of 2023, the bonds are finding a wider audience.

Catastrophe-bond funds marketed under Europe’s UCITS label, which is designed to protect retail investors, have seen their assets under management rise 12% this year to a record $12 billion, according to <-bsp-bb-link state="{"bbHref":"bbg://securities/2336608D%20LN%20Equity","_id":"00000190-48be-d497-a7fb-ecbf907d0000","_type":"0000016b-944a-dc2b-ab6b-d57ba1cc0000"}">Kepler Partners, a research and advisory firm. The development means that cat bonds, as they’re often called, sold through UCITS now make up roughly a quarter of the entire market ...