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NGS Super diversifies through catastrophe bonds
A new fund investing in catastrophe insurance-linked securities, the Fermat ILS Yield Fund, has been initiated with the help of a seed investment by industry super fund NGS Super.
It is the first Australian offshore unit trust set up by investment adviser Brookvine and Fermat Capital Management, an investor in insurance-linked securities including 'catastrophe bonds'.
NGS Super chief executive Anthony Rodwell-Ball said the insurance-linked securities investment had been on the agenda for some time.
"We are particularly attracted to the diversification benefits it provides and the possibility of the sorts of double-digit yields that have been realised in the past," he said.
John Seo, co-founder and managing principle of Fermat Capital Management, said the investment demonstrated a continuing trend for institutional and high net worth investors to favour insurance-linked securities as an attractive diversification opportunity.
Brookvine chief executive Steven Hall said his company had worked with Fermat for two years in Australia and New Zealand in developing the fund, which was complicated and resource-intensive but warranted the effort.
According to Brookvine, insurance-linked securities are one of a few asset classes with return drivers that are different to mainstream equity and credit markets.
The Fermat ILS Yield Fund is an Australian-domiciled managed investment scheme open to institutional investors.
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