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GAM STAR CAT BOND

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GAM Star Cat Bond is a UCITS compliant fund seeking to capture attractive, long-term, positive returns through an actively managed portfolio of catastrophe bonds (Cat Bonds). Co-managed by Swiss Re Insurance-Linked Investment Advisors Corporation (SRILIAC), part of long time Cat Bond market leader Swiss Re, the Fund has over a 10-year track record of long-term positive results while exhibiting low correlation to traditional asset classes.

What are Cat Bonds?

Fundamentally diversified returns driven by natural events that have shown low correlation to other asset classes even in times of market stress."

Our Edge

Global reinsurance leader

Swiss Re has developed a deep understanding of natural catastrophe (Nat Cat) risk over its 160+ year history. SRILIAC was launched to offer this risk knowledge and its applications in the Cat Bond market to investors.

Independent view of risk

We use Swiss Re's own underwriting tools and full-fledged proprietary Nat Cat models - not the third-party commercial resources relied upon by the market. This results in an independent and transparent view of risk that has contributed to our outperformance.

Active management

Our active portfolio construction leads to a differentiated portfolio and our active market participation seeks to drive alpha creation through the Cat Bond market cycle.

Investment Team

SRILIAC is Swiss Re's wholly owned subsidiary and an SEC-registered investment adviser based in New York. Our investment team has been participating in the Cat Bond market for more than two decades, with our CIO and Head of Portfolio Management having managed Cat Bond strategies together for the past 8 years.

The team's deep market expertise, combined with their access to Swiss Re's institutional knowledge in Nat Cat modelling, underwriting, and portfolio analytics are core enablers of our Cat Bond strategies.

Dr. Rom Aviv joined GAM Investments in 2025 to lead its ILS business.

Our independent view of risk and market agility helps us ensure fair compensation for each position through pricing cycles."
MariaGiovanna Guatteri
CEO SRILIAC, Alternative Capital Partners
Weilong Su
Head Portfolio Management SRILIAC, Alternative Capital Partners
Dr Rom Aviv
Head of ILS

Philosophy and Process

Investment Philosophy

We believe that the Cat Bond market requires specialized knowledge and an active investment approach.

Like other asset classes, the Cat Bond market is dynamic, with a healthy secondary market, shifting relative value across market segments, as well as significant structural and quality differences among individual instruments. However, unlike other asset classes, analysing the market's underlying risk - primarily Nat Cat risk - is a unique process that involves reinsurance-focused tools and methods.

Our market approach is consistent with this philosophy, where we leverage Swiss Re's reinsurance capabilities while actively participating in the market to build and manage diversified portfolios that seek to generate long-term outperformance.

Investment Approach

The teams' investment approach is an active process that comprises three pillars and which focuses on understanding macro market dynamics, multi-faceted relative value prioritization, and the thorough underwriting of each transaction through its lifetime.

The ongoing management and construction of the portfolio is informed by the team's outlook, the underwriting processes' results, and transactions' marginal contributions to various portfolio metrics. This holistic approach seeks to build portfolios that favour transactions deemed to be well structured and of higher quality, while also ensuring adequate compensation for the risk being taken.

1

Transaction underwriting

  • Leveraging Swiss Re's Nat Cat models and underwriting tools to holistically analyse transactions' quantitative and qualitative characteristics
2

Strategic capital allocation

  • Proprietary portfolio optimization process that aims to promote long-term, risk-adjusted performance and portfolio resiliency
3

Active market participation

  • Investment and rebalancing decisions driven by changes in relative value and our market outlook

Reasons to Invest

Diverse source of returns

Returns are linked to the occurrence of catastrophes – such as earthquakes or windstorms – rather than economic drivers and therefore cat bonds tend to perform independently of traditional asset classes.

Stable source of alternative returns

Cat bonds are a form of insurance-linked security (ILS) and provide an efficient solution for re/insurers to transfer insurance risk from their balance sheets to capital markets, while seeking to offer steady, attractive yields in a low yield environment.

Low exposure to traditional risk

The uncorrelated nature of the asset class to the broader market means there is low exposure to credit, interest rate and financial market risk.

Solid track record

A track record of delivering positive returns during differing market environments underpins the value of this asset class as a portfolio diversifier.

Key Risks

Capital at risk

All financial investments involve an element of risk. Therefore, the value of the investment and the income from it will vary and the initial investment amount cannot be guaranteed.

Credit Risk / Non-Investment Grade

Non-investment grade securities, which will generally pay higher yields than more highly rated securities, will be subject to greater market and credit risk, affecting the performance of the Fund.

Interest Rate Risk

A rise or fall in interest rates causes fluctuations in the value of fixed income securities, which may result in a decline or an increase in the value of such investments.

Credit Risk / Debt Securities

Bonds may be subject to significant fluctuations in value. Bonds are subject to credit risk and interest rate risk.

Insurance-Linked Securities Risk

Cat bonds are exposed to catastrophes through which they may suffer substantial or total losses of amounts invested. In such an event or combination of events, which may happen at any time, the Fund’s value may fall significantly and may not recover.

Liquidity Risk

Some investments can be difficult to sell quickly which may affect the value of the Fund and, in extreme market conditions, its ability to meet redemption requests.

Currency Risk - Non Base Currency Share Class

Non-base currency share classes may or may not be hedged to the base currency of the Fund. Changes in exchange rates will have an impact on the value of shares in the Fund which are not denominated in the base currency. Where hedging strategies are employed, they may not be fully effective.

Thought Leadership Papers: Swiss Re

January 2025

January 2025

September 2024

October 2023

Fund Information

Contacts

Speak to a member of the GAM ILS team: ILS.info@gam.com

 

Please visit our Contacts and Locations page.

GAM is not a client of SRILIAC nor an investor in any SRILIAC investment vehicles. SRILIAC serves as a co-investment manager sub-adviser with discretionary investment powers for certain of GAM’s investment vehicles. GAM has not received any cash or any non-cash compensation in exchange for this endorsement. GAM compensates SRILIAC in connection with the services it provides to GAM investment vehicles. As a result of SRILIAC’s investment sub-advisory co-investment management relationship with GAM, GAM has an incentive to make positive statements about SRILIAC, its employees and its affiliates.

Disclaimer: Past performance is not an indicator of future performance and current or future trends. The indications could be based on figures denominated in a currency that may be different from the currency of your residence country and therefore the return may increase or decrease as a result of currency fluctuations. Capital at risk: all financial investments involve an element of risk. Therefore, the value of the investment and the income from it will vary and the initial investment amount cannot be guaranteed. Any reference to a security is not a recommendation to buy or sell that security.

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