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Hong Kong looks to help economies mitigate risks from natural disasters and has partnered with the World Bank in further developing the market for insurance-linked securities.
(Bloomberg) -- Managers who went all out on the best hedge fund bet of 2023 are starting to recalibrate their portfolios, amid signs that the so-called catastrophe bonds underpinning the strategy are headed for a rough patch.Most Read from BloombergOne of the Most Infamous Trades on Wall Street Is Roaring BackStock Traders Bracing for Worst Shrug Off Hot CPI: Markets WrapUS Core Inflation Tops Forecasts Again, Reinforcing Fed CautionChina Has Never Canceled This Many Shipments of US WheatNY Says
Fermat Capital Management just had the best year in its more than two-decade history, after outsize bets on catastrophe bonds delivered record results.
China could see robust growth in catastrophe bonds, or cat bonds, as policymakers seek more financial tools to share the risks from losses from natural disasters, as climate change increases the frequency and severity of floods and typhoons, according to insurance experts.
Catastrophe bonds, offering high returns and portfolio diversification, are gaining popularity in the City despite the growing frequency of extreme weather events.