Fueling Growth: Ambassador Fund's Dominance in ILS Investments
Strategic Launch and Initial Capital Deployment
Launched in the third quarter of 2021, the Ambassador catastrophe bond fund by Embassy Asset Management emerged as a notable player in the US mutual ILS fund sector. The fund's primary focus is on non-correlated investment strategies designed to generate consistent income for its clientele. Its initial capital deployment commenced in the quarter ending April 30th, 2023, marking its entry into catastrophe bond investments and establishing its first private industry-loss warranty (ILW) arrangements through the Consulate Re structure.
Sustained Asset Expansion and Portfolio Composition
By January 31st, 2025, the Ambassador Fund's assets had already climbed to nearly $418 million. At this juncture, the portfolio predominantly comprised $330.3 million in catastrophe bonds, supplemented by over $59 million in preferred note investments in ILW contracts via Consulate Re, with remaining assets allocated to short-term investments. The fund's momentum continued, with total net assets reaching close to $512 million by April 30th, 2025, reflecting a substantial 23% increase within the quarter. This robust expansion further propelled the fund's assets to $537 million by the end of June of the same year.
Evolving Investment Landscape: Cat Bonds and ILW Steadiness
As of April 30th, the fund's investment mix revealed a significant portion—$403 million—dedicated to catastrophe bonds. Concurrently, investments in ILWs through Consulate Re remained stable at $59 million, indicating a consistent strategy for this asset class. Short-term assets also saw an increase, nearing $35 million, alongside an additional $14.7 million in net assets exceeding liabilities, representing available cash for future deployment. The fund's commitment to ILW structures was further underscored by its maintenance of 10 Consulate Re positions, with a majority being recent 2025 series investments.
Venturing into Private ILS: The Schrodinger Fund
Beyond its mutual fund offerings, Embassy Asset Management has also established a private insurance-linked securities (ILS) fund strategy since 2024. This new venture, named Schrodinger Fund I, LLC, adopts a more opportunistic approach to cat bond and ILS investments. With a broader investment mandate, the Schrodinger Fund aims to achieve higher returns compared to the Ambassador Fund. By March 2025, the Schrodinger Fund I had accumulated approximately $26 million in assets, signifying Embassy Asset Management's diversified engagement in the ILS market.
