GAM Holding AG, the parent company, reported yesterday that its GAM Star Cat Bonds fund strategy, the one managed by Fermat Capital Management, has continued to be one of the few bright-spots in its fixed income investment offering, even during a particularly volatile quarter.
With the catastrophe bond market buoyant over the last few years, in terms of issuance, while major losses have not impacted the market, investors have increasingly been looking to deploy capital into the space.
For managers of larger cat bond funds, issuance has been sufficient to enable them to welcome new investors and assets, something the GAM cat bond fund managed by Fermat has benefited from.
Fermat Capital Management has been portfolio managing the GAM marketed catastrophe bond fund, a UCITS compatible fund structured named the GAM Star CAT Bond Fund, for a number of years and has successfully grown it to become the largest cat bond fund in the UCITS market.
That’s been beneficial to GAM, which has, like all asset managers, experienced a level of pressure due to volatility in markets in recent times.
GAM Holding Group CEO Peter Sanderson noted “pressure on the level of assets under management in the current market environment” but also cited “net inflows across a range of strategies” including in fixed income, which helped overall net flows remain positive for the investment group.
Overall Investment Management AuM at GAM Holding totalled CHF 30 billion at the end of March 2022, down from CHF 31.9 billion as at the last day of 2021.
Net client outflows in fixed income were an area of AuM decline, totalling CHF 396 million.
But positively, the asset manager again highlighted the catastrophe bond fund strategy as a bright-spot, saying these outflows were partially offset by inflows into the GAM Star Catastrophe Bond fund.
The GAM Star CAT Bond Fund, managed by Fermat Capital Management, extended its lead slightly during Q1, as it added roughly 3% in size to the strategy to reach almost $2.55 billion of cat bond assets under management at the end of March 2022.