Hedge Fund Fermat Says Returns Hit After Cat-Bond Selloff (2)

Fermat Capital Management, one of the world’s biggest investors in catastrophe bonds, says anxiety about this year’s hurricane season has already left a meaningful dent on returns.

“Returns in May were low and even negative for a lot of funds,” Brett Houghton, managing director at Fermat, said in an interview. “Widespread fears about a particularly severe hurricane season meant there was a lot of selling pressure in the secondary market.”

The hedge fund manager, who helps oversee about $9.5 billion in assets, said Fermat’s returns for the first six months of the year were “in line” with the ...