Fermat Capital Management nears $10bn in cat bond and ILS assets

Strong growth in catastrophe bond and insurance-linked securities (ILS) assets thanks to successful capital raising efforts sees Fermat Capital Management now fast-approaching the landmark $10 billion in AUM.

Fermat has been the largest, in asset terms, of the specialist investment managers in the catastrophe bond and insurance-linked securities (ILS) space for more than a year now.

In the manager’s latest disclosure to Artemis, for our ILS fund manager directory, Fermat has revealed that its cat bond and ILS AUM reached $9.8 billion at the end of May 2023.

That’s up from $8.9 billion at the mid-point of 2022, but perhaps more impressively over a billion dollars higher than its ILS AUM had been reported at the end of 2022.

Which means Fermat Capital Management has experienced somewhere between 12% and 14% growth in its ILS AUM over the course of just the first five months of 2023.

Although, important to note that some of this growth is expected to be due to the recovery in cat bond valuations seen, given it has perhaps the largest cat bond portfolio in the market and so will have seen a valuation decline and recovery on recent global asset value related pressures and the hurricane Ian uncertainty the market had experienced.

But, it’s clear Fermat has also been the recipient of strong investor inflows in 2023 as well, helping it to grow its catastrophe bond fund strategies considerably.

Recall that Fermat Capital Management’s Co-Founder and Managing Director John Seo said earlier this year that the manager had set a goal to raise fresh capital of $2 billion in 2023, roughly half of that amount expected in the first-half of this year.

That now seems to have been the case and Fermat is on-track to meet this goal by the end of the year.

As long as the cat bond market is not derailed by major catastrophe loss activity, or any other global events, catastrophic or macro, through the rest of 2023, it seems Fermat will have ample opportunity to extend its asset base further, given the strong cat bond issuance conditions we’ve been seeing and that are expected to continue later this year.

View information on many dedicated ILS fund managers, as well as reinsurers offering ILS style investment opportunities, in our Insurance-Linked Securities Investment Managers & Funds Directory.