The AHL Cat Bond Programme follows a long-only systematic approach to provide exposure to insurance risk premia via tradable insurance assets. The Programme aims to balance portfolio risks, target returns of 5–7% (over the risk-free rate) in the absence of major insurance events¹, with a naturally low correlation to bonds and equities.

The Programme exclusively trades publicly listed catastrophe (‘cat’) bonds, which we consider to be the most liquid and flexible way to access catastrophe risk. Cat bonds span a range of perils and seniorities, feature a liquid secondary market, and have pricing transparency through broker marks and TRACE eligibility. Man AHL believes the cat bond space is ideal for a systematic, non-discretionary approach due to the unpredictability of natural catastrophes.

The Programme is designed with a focus on portfolio construction emphasizing risk, return and diversification, rather than opportunistic trading. By diversifying across perils, geographies, and seniorities, the Programme manages associated tail risks whilst avoiding poor risk/return assets.

Our unique approach to the Cat bond space has been developed by a team with extensive history of innovative systematic model development. At Man AHL, research into cat bond modelling has been conducted since 2007 and implemented in another flagship AHL programme since 2017.

1. Whilst the investment team will seek to achieve the target(s)/expectations referred to, there is no guarantee they will be achieved.