Fermat fund taps ALERT, CATRADER to assess risk

BOSTON—Hedge fund manager Fermat Capital Management L.L.C. has chosen AIR Worldwide Corp.'s catastrophe risk management systems for use in managing Fermat's catastrophe bond investment portfolio.

Fermat is one of the largest investors in catastrophe bonds. The Westport, Conn.-based hedge fund manager has licensed AIR's CATRADER catastrophe risk modeling application and ALERT, AIR's online real-time loss estimation service.

Fermat said the AIR's catastrophe models enable the fund manager to generate loss estimates for a wide range of potential investments, with those simulations allowing better management of portfolio risk and improved assessment of potential returns on catastrophe-related investment instruments.

Using ALERT in conjunction with CATRADER will help Fermat determine portfolio risk in real-time as events occur.

AIR has provided modeling support to the catastrophe bond securitization market since 1997, both through consulting and through CATRADER.

Boston-based AIR is a unit of the Insurance Services Office Inc.