A central component of our investment process is a highly developed, proprietary strategy for pricing, risk analysis, and risk management branded as the CatAPM® model. The CatAPM® model is used for ILS relative-value trading, portfolio construction and portfolio optimization. It is derived from an asset pricing model, adapted for use in continuous-time trading and portfolio optimization of ILS. CatAPM® breaks completely free of the confines of the bell-curve distribution for modeling security returns and classic correlation measures for estimating the downside risk of portfolios. CatAPM® achieves this with proprietary mathematical and computational frameworks. Knowledgeable use of the CatAPM® model has allowed Fermat Capital to be a major presence in the traded secondary markets in catastrophe bonds ever since its founding in 2001.