CATCo considers raising new capital for retro reinsurance fund

by Artemis on September 21, 2015

Bermuda-headquartered CATCo Investment Management, the reinsurance and retrocessional reinsurance linked investment and fund manager, said this morning that it may seek to raise new capital through a new equity raise for its listed Reinsurance Opportunities Fund.

Following recent meetings with existing shareholders in the retrocessional reinsurance focused CATCo Reinsurance Opportunities Fund Ltd. the manager said that it is “considering fundraising options for investment into the January 2016 portfolio.

CATCo Investment Management, which announced its acquisition by insurance, reinsurance and financial services group Markel Corporation this month, believes the fund is “appropriately positioned to continue to deliver attractive returns through its focused strategy.”

The manager sees opportunities to underwrite more retrocessional business at the forthcoming January 1 2016 renewal season, so is considering a new equity raise to boost its capacity and ultimately increase the funds size.

CATCo held meetings recently with both existing and potential new clients of its reinsurer of CATCo-Re Ltd., and believes that interest levels in the reinsurers retrocessional protection products is much greater than experienced in recent years.

If demand is indeed high for retrocession at 1/1 CATCo will be well-positioned to take advantage of this, as the leading collateralised retro market currently. By raising new capital through an issue of equity, the CATCo Reinsurance Opportunities Fund Ltd. will be able to participate much more and its existing investors will also benefit from the increased scale.

CATCo said a further announcement will be made in due course.

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