Fermat Capital Management Brings Cat and ILS Bond Assets to $ 7.5 Billion

Fermat Capital Management LLC, the Westport, Connecticut-based investment fund manager that increased its catastrophe bond and insurance-related securities (ILS) assets under management to $ 7.5 billion before the end of 2020.

In fact, the latest figure we have for Catastrophe Bonds and ILS Assets Under Management from Fermat Capital Management is $ 7.5 billion as of November 2020, suggesting that further asset growth may have been possible before. the end of the year.

Fermat Capital Management is largely focused on investments in catastrophe bonds, therefore fully securitized issues comprising insurance, reinsurance and retrocession portfolios exposed to natural catastrophes and extreme weather events.

The investment manager has been in business since 2001, when brothers John and Nelson Seo co-founded Fermat Capital with just $ 30 million from AuM and began investing in the ILS and reinsurance market on behalf of of their investors.

Fast forward almost two decades and the AuM figure of Fermat Capital ILS has grown steadily. A little over a year earlier, Fermat Capital Management had $ 6.8 billion in ILS assets as of September 2019.

According to Directory of Artemis ILS fund managers.

Fermat Capital, given its focus on catastrophe bonds and the fact that it manages one of the largest UCITS catalytic bond funds (the GAM Star Cat Bond Fund which holds more than $ 2 billion in assets), will have been able to deploy new capital raised in the very active market for catalytic bond issues in the fourth quarter.

As detailed in our new Catastrophe Bond Market report, issuance reached record levels in the fourth quarter of 2020 and full-year issuance also broke all records.

For established ILS investment managers like Fermat Capital, who have a long track record of managing cat bond portfolios, this issuance activity will have provided a significant opportunity to add new capital, while turning over some of the old positions. of the portfolio for a higher return. new vintage offers, which in recent months have been accompanied by higher risk-adjusted coupons.

This opportunity may have allowed Fermat to further expand its catastrophe bond portfolios, perhaps even adding a little more AuM by the end of 2020.

See detailed information on the main ILS (Insurance-Linked Securities) investment fund managers in our directory.