Markel CATCo targets $250m+ capital raise for listed fund

by Artemis on November 8, 2017

Markel CATCo Investment Management Ltd., the collateralized reinsurance and retrocessional investment fund manager, is aiming to raise at least $250 million of new capital for its stock exchange listed retrocessional reinsurance fund, to take advantage of new demand at the January renewals.

Having raised over $1.8 billion for its private ILS funds in recent weeks, thanks to capital commitments from both existing and new investors in its retrocession and reinsurance linked investment strategies, Markel CATCo has now published an updated prospectus for its listed fund, stating its intention to raise further equity capital through an initial raise of $250m or more.

The Directors of the CATCo fund have the discretion to increase the size of the capital raise if the opportunity presents itself.

New C Shares will be issued to allow new investors to enter the fund, with any assets raised to be held until the January 2018 reinsurance renewals, after which they would be deployed and fully invested in the firm’s retrocessional reinsurance strategies.

The C Shares will be converted to Ordinary Shares once sidepockets from 2016 and the major 2017 catastrophe events are no longer required, meaning new investments in the fund will be segregated from any assets exposed to potential losses.

The fund-raising is expected to be completed by the end of November, with shares issued in early December, putting Markel CATCo in a position to have an enlarged asset pool in time for the January reinsurance renewals to take advantage of any increase in pricing for its retrocession products.

Markel CATCo, as a leading retro provider, was hit hard by recent hurricane loss events and so is raising new funds to take advantage of any higher pricing available at the January renewal. With funds already raised into its private ILS strategies, the listed fund is now also set to get a boost in size.

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