The GAM Star Cat Bond Fund strategy has experienced a meaningful outflow of investor capital we understand, with the UCITS fund’s assets under management declining by approximately 25%, or around US $650 million, just in the month of April 2025.At March 31st this year, the GAM operated UCITS catastrophe bond fund strategy counted its assets under management (AUM) at almost US $2.57 billion.By the end of April that total net asset figure for the GAM Star Cat Bond Fund had dived to just under US $1.92 billion.It’s one of the most significant investor outflows we’ve ever seen in the catastrophe bond and insurance-linked security (ILS) fund space, especially when it has not been driven by poor performance, given the fund’s returns have generally remained in the top-tier over its history.

In this case the driver appears to be the recent announcement of a change in manager of the fund.Recall that, that it was partnering with reinsurance firm Swiss Re’s registered investment advisor unit Swiss Re Insurance-Linked Investment Advisors Corporation (SRILIAC) on its cat bond and ILS fund strategies.The announcement saw Swiss Re lined up to become the co-investment manager of GAM’s ILS fund range, including the GAM Star Cat Bond UCITS Fund, as from May 7th, so tomorrow’s date.

incumbent manager of the portfolios of GAM’s cat bond funds, Fermat Capital Management, told us that it was not consulted on the termination of its investment management partnership with GAM.It also seems investors in the GAM ILS funds only learned of the change in investment manager on the same date, of April 7th.Fast-forward one month, with Swiss Re set to take on co-management of the GAM cat bond fund as from tomorrow, the UCITS GAM Star Cat Bond strategy is now approximately US $650 million smaller.

Interestingly, over the same period, Fermat Capital Management’s own brand Fermat UCITS Cat Bond Fund has increased its net assets by more than US $383 million, to reach a new high of almost US $1.19 billion as of the end of April 2025.It’s not the only UCITS cat bond fund to grow either, with growth seen across a wide-range of strategies in the UCITS cat bond fund marketplace through April, some of which may have been investors reallocating.Clearly, some of the flows into Fermat Capital Management’s own UCITS cat bond fund will be from investors that have now exited the GAM strategy, that is to be expected given Fermat’s long-standing track-record with the GAM fund, having managed it since , as well as in catastrophe bond investment management in general.

However, it’s worth also noting that this is a time of cat bond market growth, with new investors and mandates being won across the sector as well.We reached out to GAM for comment on the AUM moves in the UCITS cat bond fund, to which a spokesperson responded, “There have been redemptions from the fund, which is very common during periods of structural transition and a manager change.For example, for some clients, even if they wish to remain, there is a procedural trigger to auto divest pending due diligence performed on Swiss Re as new Co-Investment manager.

“The fund has met redemption requests in an orderly manner and has been able to sell bonds at attractive prices, benefiting from the excess cash in the cat bond market, all within its stated liquidity profile and regulatory framework.“The fund benefits from a global, highly diversified investor base that embraces the changes.As of today, we have not received any additional significant redemption requests, and we are already seeing interest from new and existing investors who view the transition as an opportunity to access deep risk insight and outstanding investment management capabilities, as the co-management structure with Swiss Re will bring unparalleled risk underwriting and catastrophe bond knowledge.”.

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