A record year for cat bond funds, and still no room for a $5m treaty

Artemis counted 21 UCITS catastrophe bond funds in July. Between them they held $21.06bn, and five of those funds held about $16bn of it.

A catastrophe bond, or cat bond, is a bond whose principal can be used to pay a sponsor's disaster losses if a defined event occurs. UCITS is the EU framework for funds that can be sold to the public across member states. So these are the funds through which many investors hold cat bonds, and the count tells you how concentrated that channel has become.

Who holds what

Twelve Cat Bond Fund was the largest at roughly $4.6bn, then Schroder GAIA at just under $4bn, then Fermat's UCITS fund, Leadenhall and GAM Swiss Re. The other sixteen funds share the remaining $5bn or so.

What the shape tells you

That shape tells you more than the growth number does. A fund running billions cannot spend diligence time, the checking of a deal before buying it, on a small private placement, so it buys what the market already turns into a standard instrument: rated 144A paper, meaning bonds carrying a credit rating, in sizes that move the portfolio. (144A is the US rule that lets securities be sold to large institutions without full public registration.) The sector added $1.84bn in the first seven months of 2026 and none of that new money changed the minimum size of a deal worth structuring.

A wholesale market works in pallets. Nobody is being difficult: a warehouse that handles thousands of pallets a day does not stop to open a single box.

Capital without a way in

So for a carrier placing $5m to $50m of limit, a record year in cat bond funds is not an offer of capacity. Limit is the maximum a reinsurer would pay under a contract, and the carrier is the insurer buying that protection. There is no shortage of capital, or of appetite for the risk. What is missing is a format that turns a small treaty into something a fund of that size can hold and exit.

That is the gap we work on at NextBlock RWA.

In plain words

Five funds hold most of the money, and they buy large, standardised, rated deals. A small treaty does not fit that shape yet. Plenty of capital exists, but the treaty needs a wrapper that a fund can buy and later sell.

Information only. Not an offer or solicitation.