GAM has collaborated with Fermat Capital Management to launch GAM FCM Cat Bond. GAM has invested with Fermat for over six years and now has an exclusive arrangement to offer this fund to the broader market place.
The fund’s objective is to capture the structural return from the catastrophe market via a portfolio focused on catastrophe bonds and complimented by exposure to other insurance linked securities (ILS) to produce attractive, consistent returns which are uncorrelated to traditional asset classes.
Dr John Seo (pictured), Co-Founder and Managing Principal at Fermat Capital Management says: “Given catastrophe bonds’ unique underlying risks, they are likely to remain a truly uncorrelated asset class. During the recent financial crisis, cat bonds have proven that they deserve their reputation as a genuine alternative investment strategy.”
Fermat’s investment philosophy is based on the premise that catastrophe bonds provide a persistent and repeatable source of attractive risk-adjusted returns within the broader ILS universe. The team employs a focused approach based on intensive analysis, a deep market understanding, and proprietary, highly sophisticated modelling software to create a portfolio of select issues.
Catastrophe bonds offer significant diversification potential to a client’s portfolio of investments. Returns are not dependent on any macroeconomic or financial factors, as is the case for most asset classes, but rather on the occurrence, or not, of natural catastrophes, such as earthquakes or hurricanes.
Craig Wallis, Global Head of Institutional & Fund Distribution says: “We are excited to be able to work with such a high calibre manager and to offer this very interesting investment strategy to a broader set of clients.”
