The Government Superannuation Fund Authority of New Zealand has demonstrated its growing appetite to invest into catastrophe bonds and other catastrophe reinsurance opportunities, by adding insurance-linked securities (ILS) specialist Elementum Advisors to its roster of managers this year.Having invested into insurance-linked securities (ILS) for more than a decade, this is the first expansion of the ILS manager roster for the NZ Government Super Fund since 2013.The Government Superannuation Fund Authority of New Zealand is an autonomous entity that manages the pension assets of state sector employees and has been investing into insurance-linked securities (ILS) since 2010.Insurance-linked securities (ILS) investments began with a small commitment to ILS and reinsurance fund manager Nephila Capital that year.

The NZ Government Super Fund then followed that up with an allocation to Fermat Capital Management n early 2013.Those allocations focus on catastrophe bonds and private collateralized reinsurance and the catastrophe risk focused ILS allocations have delivered strong returns in recent years, which has now led the NZ Government Super to look at adding another investment manager.We’ve learned that Elementum Advisors was added to the external managers roster for this pension investor, with the appointment confirmed on June 23rd 2025.

As a result, there’s no visibility of any allocation having been made to any Elementum Advisors ILS fund strategy at this time, given the Government Superannuation Fund Authority of New Zealand only reports its investments as of the mid-year.At that time, catastrophe risk exposed ILS assets were reported to be 3.2% of the Super Fund’s portfolio, while an additional life settlements allocation made via Apollo Global Management, LLC had shrunk slightly to 1.4%.Performance wise though, the catastrophe reinsurance focused ILS investments had a stellar year for the NZ Gov Super Fund, returning 20.1% and significantly beating the benchmark in the year to June 30th 2025.

This shows that the contribution from private ILS outperformed the cat bond investments, given cat bonds would not have got close to 20% alone.The Government Superannuation Fund Authority of New Zealand said on the last year’s reported performance that “catastrophe risk significantly outperformed its funding.” Over a 3-year horizon, the catastrophe risk ILS investments made by the NZ Gov Super averaged a 13.2% return, while over a five-year horizon that was 9.1%.At those levels of return, it is perhaps no surprise the NZ Gov Super Fund has looked to add another ILS manager, in Elementum Advisors, this year.

Life settlements only delivered a 3.2% return in the last year, but still slightly beat their benchmark.Catastrophe risk focused ILS investments in Level 1 assets totalled just over NZ $174.5 million as of June 30th 2025, while Level 2 assets were around NZ $5 million, which is slightly up on the prior year’s NZ $165 million and NZ $6 million.Life settlements shrank from NZ $98 million to just over $83 million as of June 30th.

The NZ Government Super Fund’s target allocation for catastrophe risk ILS remains at 3%, so with the asset class allocation already at close to 3.2% you might think there is no room to add a new ILS manager at this time.But, the Authority does have the ability to rebalance its catastrophe risk ILS allocation to plus or minus 2% and given the strong performance over the last few year’s, it could clearly be motivated to do so at this time.It’s not clear when an initial allocation to Elementum Advisors could be made.

It seems likely either just after the mid-year, so before the Atlantic hurricane season got fully underway, or it could be made later this year, so in time for the 2026 portfolio construction.Either way, more visibility might be available next year and it will be interesting to see if the catastrophe ILS investments made by the New Zealand Government Superannuation Fund Authority increase in size..

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