GAM to launch Catastrophe Bond fund

GAM has introduced a Catastrophe Bond fund to its range. Through the issuance of cat bonds insurers can achieve multi-year protection against catastrophes like earthquakes and hurricanes and investors can earn attractive returns through the purchase of such bonds.

The group is collaborating with insurance risk and catastrophe bond specialists Fermat Capital Management on the GAM FCM Catastrophe Bond fund, which the group says will be uncorrelated to traditional asset classes. Cat bonds, as they are known, were initially deemed esoteric but are now gaining acceptance among investors and are one of the fastest growing segments of the insurance-linked securities market. They transfer risk from the sponsor (insurers, re-insurers or corporates) to the investors and reduce exposure to counterparty risk. Investors can benefit from attractive returns a...