Markel CATCo raises another $10.9m for retro reinsurance fund

Bermuda headquartered reinsurance and retrocession linked investment and fund manager Markel CATCo Investment Management Ltd. has raised another $10.9 million for the exchange listed CATCo Reinsurance Opportunities Fund Ltd.

The investment manager said that the latest capital raise, under its current placing programme for the fund, was in response to “continued investor demand and increasing demand for its reinsurance catastrophe protections.”

To take on the new capital Markel CATCo has arranged the issuance of 10,675,000 new C Shares in the Reinsurance Opportunities Fund at an issuance price of $1.021 per share, raising $10.899m (before costs and expenses are taken into consideration).

In accordance with the fund’s investment policy, the net proceeds of the share issuance will be invested into the Markel CATCo Diversified Fund (the master fund to the listed vehicle), and will be invested into the Master Fund’s portfolio.

The announcement from Markel CATCo explains that the new fund capital will be invested “alongside additional capital raised by the Master Fund,” which suggests that Markel CATCo has perhaps raised more capital for its other strategies.

The newly issued C shares will be listed on the London Stock Exchange’s Specialist Fund Market and dual-listed on the Bermuda Stock Exchange (BSX) as well, with an expected date of listing of the 31st March 2016.

Once listed the CATCo Reinsurance Opportunities Fund Ltd. will have 273,224,673 Ordinary Shares and 102,510,018 C Shares in issuance. Using the value of each share class at yesterday’s close that would total roughly $451m of assets in the fund currently.

Markel CATCo has been steadily growing the size of the retrocessional reinsurance fund in recent months, with amounts added at most major renewals. With Markel CATCo commanding a growing proportion of the global retro market, this growth looks set to continue.