Hedge funds have been grabbing catastrophe bonds now for a couple of years, but since enormous claims from last year’s North American hurricane season drained many a reinsurer of assets, they’re turning to hedge funds again to replenish the till. Bloomberg News reports that reinsurers are boosting the amount needed to accommodate hurricane risks by 50% at a time when hedge funds are looking to make up for slowdowns in inflows with investments in the likes of cat bond offerings, which boast yields of up to 40 percentage points over investment grade debt. HFs invest in this industry in different ways. Chicago-based Citadel Investment Group invests in reinsurance companies, while Soros Fund Management partnered with HBK Investment Management to fund a reinsurance start-up. In general, however, they keep mum. Professor Joseph Calandro Jr. of the University of Connecticut, an expert on cat bonds, explains: ”When an investment area is lucrative, all the funds tend to rush into it. There’s some element of protecting one’s investment turf.”