Market Commentary:
The Adaptation Thesis

The world is witnessing a paradigm shift as climate risk is increasingly priced across asset classes. Hurricanes, typhoons, wildfires, and droughts are not just natural disasters; they are now financial events with tangible impacts on industries and economies. Recent trends in hurricane and typhoon activity, domestically and globally, underscore a significant change in weather patterns. Hurricane Beryl set a record for its rapid transition from a tropical depression to a named hurricane and Milton’s pathway to becoming a category-five storm was the fastest ever recorded. Helene has been named the deadliest U.S. hurricane since Katrina, highlighting the escalating risk profile of these extreme events. 

This shift is more than just weather, and while no single event defines a trend, the increasing intensity of these storms signals the need to reevaluate risks in sectors like insurance, real estate, energy, and infrastructure. As the environment in which we operate evolves, so must our approach to risk management and long-term planning. For investors, this dynamic presents both risks and unprecedented opportunities. As climate volatility becomes part of the “new normal,” savvy investors are positioning their portfolios to capitalize on assets aligned with real-time climate risk pricing.

We feel that it is important for investors to have a meaningful dialogue about what this means for the market and how we translate it into our investments. To read more, fill out the form to download this report.

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