AIFAM Inc. has managed an insurance-linked securities catastrophe bond investment fund since 2006 when it launched a dedicated cat bond investment opportunity. The $34m cat bond fund has returned 10% to investors this year and 47.4% including interest since it was launched. Now AIFAM are seeking to grow that side of their hedge fund management business.
Bloomberg reports that AIFAM are seeking to grow that fund by a factor of five to $150m over the course of the next year using Japanese pension fund money. AIFAM are counting on Japanese pension funds to seek diversification opportunities over the next year and hoping that they can persuade them to invest in the catastrophe bond asset class.
Bloomberg highlight that while AIFAM’s cat bond fund has grown so dramatically over the last four years, more traditional investments such as Japans Topix index of stocks and shares has fallen by 49%. The AIFAM cat bond fund invests in about 30 to 40 cat bonds and is diversified across geography and perils. AIFAM is 24.9% owned by Tokio Marine Holdings Inc.