The growing sophistication of the Bermuda insurance and reinsurance market is the driver for the annual investment conference held here in November by Goldman Sachs Asset Management (GSAM), according to John Gauthier, GSAM?s vice president and head of insurance fixed income portfolio management.

?A collection of very smart people manage the Bermuda reinsurance companies,? Mr. Gauthier said. ?We feel that we can meet the sophisticated investment needs of Bermuda reinsurers, so there?s a good match. That?s why our Bermuda conferences have been so successful.?

The firm?s third annual event for Bermuda reinsurers will be held on November 2 at the Fairmont Hamilton Princess hotel. The conference is a half-day affair, which this year will start with lunch and then proceed until 6 p.m.

?Looking back to when we started, we perceived that reinsurers were searching for tailored investment solutions. We address this need at our conference by exploring a range of strategies and innovative investment ideas,? said Charles Fuller, vice president of GSAM?s financial institutions group. ?We are striving to be a leader in providing customised investment solutions for reinsurers.?

If you think that reinsurance companies collect premiums and simply invest them in Government bonds until claims are received, you would be significantly out of date.

?On the reinsurance side, our clients are looking at the full range of investment opportunities and trying to be thoughtful about combining various types of risk/return opportunities in a diversified portfolio,? Mr. Gauthier said.

?One of the reasons that these conferences have worked so well is that, while our clients have fixed income portfolios, investors are increasingly looking at other asset classes to diversify their investment surplus portfolios, such as ?exotic beta?, or alternative investments including hedge funds and private equity,? Mr. Fuller said.

?Having said that, it would still be fair to describe reinsurance investment portfolios as very conservative,? Mr. Gauthier added.

?Not ?put the money under the mattress? conservative, but seeking diversified returns within an overall conservative profile.?

The term ?exotic beta? refers to an investment that has exposure to a risk factor that is not correlated with global markets and has a positive expected return.

The global expert on the subject is Bob Litterman, head of GSAM?s quantitative resources group, who will lead off this year?s conference with a lunchtime discussion of exotic beta and how to find it.

Mr. Litterman?s comments will be followed by a presentation outlining Goldman Sachs?s economic outlook, a discussion of reinsurance industry trends, an accounting policy panel and an update on the fixed income market. The day will conclude with analyses of the benefits of a strategic allocation to alternative investments such as hedge funds and, separately, private equity as an asset class. Each segment will be presented by a Goldman Sachs executive.

Attendance at the conferences, which are free of charge, is by invitation only. ?We do that to keep these events tightly focused on reinsurance,? Mr. Gauthier said.

The conference attracts ?a wide range of senior management including chief financial officers and treasurers, chief investment officers and controllers,? Mr. Fuller said. Delegates are drawn from the Bermuda Classes of 1993, 2001 and 2005.

Mr. Fuller believes that ?what makes our approach unique is the breadth of our strategies. In some cases, we offer turnkey solutions for companies looking for a complete outsourcing service for their investment needs. In addition, we have the ability to fine tune our thinking towards the particular needs of insurance and reinsurance companies.?

Mr. Gauthier agreed.

?We truly customise portfolios to take account of return objectives, risk tolerance, types and duration of liabilities.

?We also look at where companies are on the maturity spectrum, i.e. their age and the level of surplus they have built up, so the customised solution is entirely appropriate. And we?ve carefully customised the agenda for this year?s conference to ensure that we hit the really important topics in the reinsurance investment universe.?

For further information, contact Jayson Remmelts at Jayson.Remmeltsgs.com.