Swiss Re announced that it will assume the role of co-investment manager for GAM’s insurance-linked securities (ILS) fund portfolio starting May 7.
The reinsurer will achieve this through its subsidiary Swiss Re Insurance-Linked Investment Advisors Corporation (SRILIAC) and will include the GAM Star Cat Bond UCITS Fund.
As of March 31, Swiss Re manages approximately US$5 billion in ILS assets, which span funds, sidecars, and customized structures. Under the new arrangement, it will also co-manage GAM’s ILS funds, which have around US$3 billion in assets under management.
Under the agreement, Swiss Re will oversee investment and portfolio management decisions. GAM will continue to manage risk oversight while leading global distribution and product structuring. The firms will also collaborate on future ILS innovation.
Swiss Re has maintained a significant presence in the catastrophe bond (cat bond) market since its inception in the 1990s. Through its capital markets division, Swiss Re has arranged cat bond transactions with a combined notional value of roughly US$50 billion, representing more than 25% of all cat bond issuance since 1997.
The cat bond market experienced substantial growth in 2024. In the first half of the year, issuance exceeded US$12 billion, setting the market on track to surpass the previous record of US$15.6 billion issued in 2023. This surge was driven by strong investor demand and an influx of new sponsors entering the market.
The Swiss Re Cat Bond Index reported a total return of 17.29% for 2024, marking the second-highest annual performance on record. This robust return underscored the market's resilience and attractiveness to investors, even amidst a year marked by significant natural catastrophe activity.
Investors in GAM’s ILS products will gain access to Swiss Re’s data and risk expertise, including support from more than 50 scientists working in catastrophe risk, over 190 proprietary peril models, and an estimated 200 terabytes of curated portfolio data.
SRILIAC is led by CEO and CIO Mariagiovanna Guatteri (pictured above), who has more than two decades of experience in cat bond portfolio management and catastrophe modeling.
Guatteri said that the ILS market reached record levels in 2024 and that returns on cat bonds have drawn renewed interest from both issuers and investors. She said the timing reflects a broader trend of increasing investor demand in the space.
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