Australian Superannuation Giant Accelerates Cat Bond Investment Strategy
Expanding Horizons: Rest Super's Growing Engagement with ILS Assets
Rest Super, a prominent Australian superannuation fund overseeing assets exceeding $100 billion for approximately two million members, has substantially increased its allocation to insurance-linked securities (ILS), specifically catastrophe bonds. This growth has been facilitated through its partnership with specialist ILS manager, Twelve Securis.
Significant Growth: Cat Bond Investments Soar by 85%
Over the past year, Rest Super's catastrophe bond investments managed by Twelve Securis have witnessed a remarkable surge of around 85%, reaching an impressive US $242 million. This expansion reflects a deliberate strategy to bolster the fund's exposure to the reinsurance-linked asset class.
A Continued Commitment to Reinsurance Returns
This notable increase in capital directed towards catastrophe bonds clearly indicates Rest Super's ongoing dedication to tapping into reinsurance-linked returns. The fund's sustained appetite for this investment category underscores its perceived value within a diversified investment framework.
Attractive Returns and Liquidity Drive Institutional Interest
Superannuation and pension funds, both in Australia and globally, have increasingly been drawn to the catastrophe bond market. Key factors attracting these institutional investors include the strong returns generated by these instruments and their relatively high liquidity when compared to private reinsurance options.
Rest Super: A Leader Among Australian ILS Investors
Rest Super is part of a growing cohort of Australian institutional investors actively participating in the ILS market. Its consistent growth in ILS allocation demonstrates a firm belief in the asset class's ability to provide attractive and diversified returns for its members.
Diversified Allocation Across Various Retirement Options
To further optimize its ILS strategy, Rest Super has strategically distributed its investments in the Twelve Securis catastrophe bond fund across eight distinct investment options offered to its superannuation and pension clients. These options span various risk profiles, including growth, balanced, capital stable, and high-growth funds.
Future Growth Potential in ILS Allocation
The majority of these ILS assets are held within the superannuation options, with a significant portion residing in the super growth fund. This broad distribution of catastrophe bond investments across its main retirement offerings signals considerable potential for future expansion of Rest Super's ILS allocation over time.
