CommInsure, the insurance business of Sydney-based Commonwealth Bank of Australia, hired GAM to manage A$300 million ($230 million) in the manager's systematic alternative risk premium strategy, a spokesman for CBA confirmed.
Funding for the GAM mandate comes from CommInsure's A$12 billion in life insurance statutory funds, which include policyholder funds and the capital to support them, the CBA spokesman said.
A GAM news release said the strategy typically targets around 15 risk premium strategies across the style categories of value, momentum and carry, designed to limit drawdowns during periods of market stress. A Zurich-based spokesman for the firm said in an email the strategy harnesses risk premiums from a variety of asset classes, including equities, foreign exchange and commodities.
The GAM spokesman said the underlying risk premium strategies are dynamic but purely systematic. As of Sept. 30, GAM — with roughly $148 billion in assets under management — had $814 million in its alternative risk premium strategy.