Insight and Intelligence on (Re)insurance Convergence with the Capital Markets

4 February 2012

Forced selling stressed US wind prices

2 September 2010

The sale of substantial portions of three cat bond funds is thought to have contributed to the pricing slump in US wind-exposed bonds over the summer, Trading Risk can reveal.

French asset manager MMA, US multistrategy hedge fund Horton Point and Swiss alternative fund manager Horizon21 sold off around $75mn of cat bonds as they wound down portfolios, according to sources.

And some opportunistic investors pounced on the portfolios, buying cheap US wind-exposed assets at knock-down prices.

Indeed, one investor...

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