Blackstone Alternative Asset Management, the hedge fund solutions unit of Blackstone, has made the first direct catastrophe bond investment for one of its flagship muti-strat alternatives funds recently.
The Blackstone Alternative Multi-Strategy Fund is one of the firm’s multi-asset class focused strategies that has incorporated elements of insurance-linked securities (ILS) and reinsurance linked investments for a number of years.
Blackstone has been bringing ILS and direct reinsurance returns to the investors in its multi-strategy funds for a long time, with allocations to the sector changing over time.
One area of focus has been to invest into a flagship strategy managed by specialist Aeolus Capital Management, with allocations made to vintages of the Aeolus Property Catastrophe Keystone fund since at least 2019.
In 2025, it appears the Blackstone Alternative Multi-Strategy Fund has maintained its allocations to the Aeolus Capital Management catastrophe reinsurance focused strategy, data seen by Artemis suggests.
At December 31st 2024, the Blackstone Alternative Multi-Strategy Fund counted a just over $14 million allocation across three sleeves of the Aeolus Property Catastrophe Keystone fund that it had allocated to.
Data disclosing the multi-strat alternatives fund portfolio as of March 31st 2025 now shows the same number of Aeolus allocations valued at a slightly higher just over $14.5 million.
The portfolio disclosure also suggests that an allocation made by the fund to the PIMCO ILS Fund strategy a few years ago has now run-off completely.
This PIMCO ILS fund allocation, a catastrophe bond strategy, was made in two investments and at one time valued at over $35 million at the end of 2022. But with PIMCO having shuttered its dedicated ILS fund strategies two years ago, the allocation had shrunk in value to $2.26 million as of December 31st 2024, but in the latest disclosure is not reported at all so has presumably run its course.
It’s worth remembering that this Blackstone Alternative Multi-Strategy Fund also has specialist ILS investment manager Nephila Capital listed as a sub-advisor, although at the last disclosure no allocation to any Nephila strategy was evident.
More interestingly though, the Blackstone multi-strat alternatives fund has made its first direct investment into a catastrophe bond in 2025, we believe.
Looking back through previous portfolio disclosures from the last few years we have not found any other direct cat bond investments made by this fund.
But, the latest shows that an investment was made in the first-quarter of this year into one of insurer SafePoint’s Nature Coast Re cat bonds.
We believe this investment has been made into the Nature Coast Re Ltd. (Series 2025-2) cat bond, given the CUSIP listed in the Blackstone fund’s portfolio disclosure.
The Blackstone Alternative Multi-Strategy Fund values its investment into the Nature Coast Re cat bond at just $250,000.
So it’s a small initial direct cat bond investment for the fund, but could be a sign of more to come.
The fund’s prospectus allows catastrophe bonds as one type of fixed income security that it can allocate to. But, as we said, we haven’t seen any direct cat bond investments made by this Blackstone fund before.
Having previously had an allocation to a catastrophe bond fund managed by PIMCO, this perhaps signals Blackstone still has an appetite to incorporate returns from these ILS structures within the fund, but now sees an opportunity to do so directly.
This comes at a time when an increasing number of multi-strategy investment and hedge funds are allocating in increasing amounts to the catastrophe bond asset class.
With Blackstone having over $3.7 billion of assets in this one multi-strat alternatives fund, but also a number of other multi-strategy funds that could also allocate to instruments such as cat bonds, it will be interesting to see if this new direct cat bond investment strategy grows for the manager over time.
Finally, it’s worth noting that the portfolio disclosure is lengthy and filings are not always easy to parse, so we could have missed others especially if the naming of certain assets in the disclosure has not used typical conventions.
