CATCo issues $7.4m in new shares to meet investor demand

by Artemis on March 30, 2011

The CATCo Reinsurance Opportunities Fund, which was listed on the London stock exchange late last year, has raised a further $7.4m by issuing shares to meet demand it has seen from investors. The fund is managed by CATCo Investment Management Ltd. who manage assets including insurance-linked securities.

CATCo issued 7,250,000 new shares at a price of 101.5 cents per share so as to satisfy the demand they’ve seen but been unable to meet in the secondary market. CATCo have been seeing such high demand from investors seeking a way to invest in the assets they manage within their reinsurance opportunities fund that issuing new shares in this way makes more shares available to those investors but also acts as a great opportunity for them to raise equity funding as well. Also a lot of the funds required to make this issue happen will have come from their existing investor base, who have been keen to get more involved in the market.

CATCo commented; “CATCo is experiencing extremely strong levels of interest from investors who are impressed by how well-diversified CATCo’s portfolio is and how well it has performed since its IPO last December. Following the IPO, the Board of Directors had authority to issue new shares amounting to an additional 10% of the IPO amount. All of this additional 10% was purchased by existing investors. Despite a number of recent catastrophic loss events, CATCo has no reason to change its projected annualized returns. CATCo has also experienced significant investor interest in its private fund. All new investment will be deployed in Q2 to take advantage of the significant increase in retro premium rates.”

They continued; “CATCo is delighted by the strong interest being shown by its shareholders of both the private and public funds and in the model. CATCo has received equally strong interest from (re)insurers. This is a solid vote of confidence in CATCo.”

This issuance and the expansion of the CATCo fund opens the ILS and collateralised reinsurance investment market to more investors and results in more investment opportunity and capital available to invest in new deals which should help to keep demand high on the investor side of the market.

The new shares will be listed on the London stock exchange in the specialist fund market and they expect trading to begin on the 31st March. As a result of this new issue of shares CATCo has 87,642,000 shares in issue.

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