Fermat sees catastrophe bond returns halved

Stormy outlook: Hurricane Beryl caused destruction in Vermont last month. After more than 18 months of uninterrupted gains, the cat bond market was hit by a sell-off in the second quarter. — AP

LONDON: Fermat Capital Management, one of the world’s biggest investors in catastrophe bonds (cat bonds), says anxiety about this year’s hurricane season has already left a meaningful dent on returns.

“Returns in May were low and even negative for a lot of funds,” Brett Houghton, managing director at Fermat, said in an interview.