The GAM Swiss Re Cat Bond investment approach is being introduced to New Zealand, offering local investors a tax-advantaged avenue to engage with insurance-linked securities (ILS). This new offering, known as the GAM Swiss Re ILS Income NZ PIE Fund, is set to commence operations on November 6th. This development signifies an expansion of investment opportunities for New Zealanders seeking exposure to catastrophe bonds within a locally optimized structure.
The newly formed PIE fund will predominantly channel its assets into the NZD-hedged share class of the established GAM Swiss Re Cat Bond UCITS fund, an Irish-domiciled vehicle that originated in 2011. This arrangement allows New Zealand investors to benefit from a potentially reduced tax burden compared to direct investment in overseas funds. Eric Finnell, GAM's Managing Director for Australia and New Zealand, highlighted that this structure provides financial advisors and their clients with access to a proven ILS fund tailored for the local market, complete with New Zealand dollar currency hedging. The core GAM Swiss Re Cat Bond UCITS strategy is a collaborative effort between GAM London Limited and Swiss Re Insurance-Linked Strategies Inc., the specialized ILS division of the global reinsurer. The underlying fund has demonstrated significant growth, with assets under management (AUM) surpassing $2.08 billion.
To facilitate this launch, GAM has collaborated with Adminis, a New Zealand-based firm specializing in wealth management technology solutions. Adminis will manage the administration, custody, and reporting for the cat bond fund within the country's PIE framework. The GAM Swiss Re ILS Income NZ PIE Fund requires a minimum investment of NZD 50,000 and is initially targeting financial advisors and wholesale investors. It will be priced weekly and is expected to distribute returns quarterly. The fund's portfolio comprises over 300 securities, predominantly catastrophe bonds, designed to cover global event risks. This move by GAM and Swiss Re enhances their market presence in New Zealand by providing an investor-friendly option for capital allocators in the region. This is not the first catastrophe bond fund to adopt the PIE format in New Zealand; Fermat Capital Management previously launched a similar fund in August.
This initiative represents a positive step towards broadening access to specialized investment products for a wider range of investors. By offering tax-efficient and locally tailored solutions, financial institutions empower individuals to diversify their portfolios and participate in global markets. Such developments foster innovation within the financial sector, contributing to a more dynamic and inclusive investment landscape that benefits both investors and the broader economy.
