Markel CATCo raises $543m for listed Reinsurance Opportunities Fund

by Artemis on November 28, 2017

Markel CATCo Investment Management Ltd., the collateralized reinsurance and retrocessional investment fund manager, has successfully raised $543 million of new capital from investors for its stock exchange listed retrocession focused CATCo Reinsurance Opportunities Fund.

The news follows a huge $1.8 billion capital raise for Markel CATCo’s private reinsurance and retrocession ILS fund strategies in October and positions the manager with a replenished pool of capacity, ready for deployment at the all-important January renewals.

So that’s an impressive $2.343 billion of fresh capital raised by Markel CATCo, across its private and listed reinsurance, retro and ILS funds, positioning the manager well to meet demand for its products at the 1/1 renewals.

The listed fund has just announced the successful placement of 543,000,000 new C Shares at the price of US $1 per share, raising gross proceeds of US $543 million, all of which commitments from investors the company said would be met in full.

Tony Belisle, Chief Executive of Markel CATCo Investment Management Ltd., commented on the successful capital raising, “We are delighted with the tremendous support shown by existing and new investors for Markel CATCo’s specialised ILS investment opportunity. The fundraise will ensure the Company continues to meet the growing demand from our buyers for our unique reinsurance protections.”

The company expects that the new shares will be listed on the stock exchange as of December 1st. After the shares are admitted for listing the CATCo Reinsurance Opportunities Fund will have 934,666,430 of outstanding shares in total, which at the current price of $1.04 per share would mean this listed fund has grown its assets under management to roughly $972 million.

That will make the CATCo Reinsurance Opportunities Fund the largest exchange listed ILS strategy and has more than doubled its size thanks to this round of fund-raising.

It’s a clear sign of the demand from ILS investors for the relatively uncorrelated returns of reinsurance-linked assets and highlights the growing demand for the ILS asset class following recent loss events.

In fact Markel CATCo, as an ILS asset manager, may reach the January renewals with a larger asset base than it had before the recent major hurricane losses, despite being one of those considered particularly exposed, a testament to investors attraction to this asset class.

For Markel CATCO, the highly successful private and now listed ILS fund capital raises position the retro-focused manager to capitalise on demand at the renewals and could see it grow its share of the retrocessional reinsurance market at 1/1.

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