Goldman Sachs' $10bn (€7.7bn) internal hedge fund has started trading in catastrophe risk, a growing market that is attracting new investors because of the high insurance premiums triggered by Hurricane Katrina.

Goldman Sachs Asset Management, which runs the Global Alpha fund, hired a reinsurance specialist from broker Benfield last October. Manoj Gupta joined the quantitative resources group to focus on insurance and reinsurance opportunities.