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The fund will offer additional spread versus other similarly rated corporate debt.
Twelve Securis has launched a commingled fund, the Twelve Securis Credit Fund, with a focus on investing primarily in Restricted Tier 1 (RT1) debt issued by insurance companies, the firm has told Insurance Insider ILS.
The fund will be managed by Dinesh Pawar, head of insurance debt at Twelve Securis, and be among the first funds to focus specifically on insurance RT1 notes.
It is offering investors on average ~150 basis points (bps) of additional spread versus Tier 2 insurance debt, and around 200bps more compared to similarly rated corporate debt.
RT1 issuance is “a growing and compelling segment of the insurance credit market”, Twelve Securis said.
“The fund provides elevated carry and access to the highest spread levels within a solidly investment-grade fixed income segment, supported by a sector with one of the lowest historical default rates,” the manager said.
It added that, from a portfolio construction perspective, RT1 notes can provide an additional source of diversification within a fixed income portfolio and can serve as an alternative or complement to an AT1-focused fund allocation.
Twelve Securis had ~$1.1bn of AuM in insurance debt/credit strategies as of 30 November 2025, including in the Twelve Insurance Enhanced Credit Fund and JSS Twelve Sustainable Insurance Bond.
Its ILS AuM stood at $8.5bn, and multi-asset AuM was $331mn, as of the same date.
The firm has incorporated RT1 exposures within dedicated sleeves of existing funds since 2017 when they were first issued, and has developed an analytical framework to identify, assess and monitor risks specific to the asset class.
The product has met with positive feedback from investors and distribution partners, and the firm will actively market it across all its core target geographies, it said.
The product launch is “a natural evolution” of its existing offering, Twelve Securis noted, building on more than 10 years’ experience managing portfolios of insurance debt.
“Pawar leads our insurance debt offering and brings multi-decade experience in managing fixed-income strategies, with a particular focus on subordinated debt,” the firm said.
He will be supported by one of the largest analytical teams dedicated to insurance debt, with a dedicated trading desk, and a full range of shared functions across Twelve Securis including dedicated investor communications and reporting, the firm added.
The fund is being launched after the RT1 market has grown materially in recent years, to reach a scale that supports effective capital deployment and diversification.
The RT1 space comprised around 56 issuances from 41 insurance companies as of 31 December, with the past year “among the strongest in terms of new issuance”, Twelve Securis said.
“We expect this growth to continue in the coming years, with RT1 issuance expanding at a faster pace than insurance Tier 2 and bank AT1, where supply is expected to be largely driven by refinancing of existing debt,” the firm noted.
The new offering will provide exposure to a liquid asset class which has a higher risk/return profile than Tier 2 insurance debt, it added.
The fund will also retain a degree of flexibility to invest across the insurance debt capital structure, enhancing diversification and allowing it to take advantage of market dislocations.
RT1 notes are a form of capital held by insurers under Solvency II rules that have come to the fore as capital instruments used under the Solvency I framework have phased out.
The development of the asset class initially lagged that of Solvency II Tier 2 notes for several reasons.
These include the need for legislation changes at national level in European countries, to enable implementation of loss-absorbency features typical of RT1 notes, among other regulatory adjustments.
Investors have also waited until they are more familiar with the Solvency II capital framework and its sensitivities. And issuers initially prioritised filling Tier 2 capacity, which remains a cheaper source of capital.
The new fund will be classified as Article 8 under Europe’s SFDR sustainable finance rules, as Twelve Securis noted that environmental, social and governance (ESG) factors remained a core component of its investment process.
“We have developed a proprietary framework to assess ESG risks across the underwriting and investment sides of insurers’ balance sheets, going beyond the scope typically covered by third-party research for the insurance sector,” it said.
By Liz Bury
January 07, 2026