There are interesting rumours floating around the market today after the Bermuda Royal Gazette said in this article that reinsurer Montpelier Re is planning to launch a London listed retrocessional reinsurance investment fund. The article from the Gazette suggests that Montpelier Re are very close to launching the listed fund vehicle which will be called the Blue Capital Global Reinsurance Fund Ltd. and would be managed by their Blue Capital Management subsidiary.
According to the article, Montpelier Re will seek to list the Blue Capital Global Reinsurance Fund on the London Stock Exchange, a home to a number of other reinsurance and insurance-linked securities (ILS) investment fund vehicles, with the Gazette’s sources suggesting that the fund could be floated on the stock exchange as soon as next week.
Blue Capital Global Reinsurance Fund Ltd. was registered with the Bermuda Registrar of Companies on the 8th October. The management firm, Blue Capital Management, is according to the Gazette “A wholly owned fund management group established to offer collateralised property catastrophe reinsurance to the traditional reinsurance market.”
The Gazette says that Montpelier Re has told prospective investors that they would be seed investing $50m in the fund themselves. Apparently they have been marketing the fund using the term CollateralPLUS as a product name, targeting investors in the ILS and alternatives space. The Gazette says that Montpelier Re are working with Barclays who are structuring the product and that it would underwrite collateralized reinsurance contracts using investor capital.
This is very interesting, as if true, it is the latest fund based collateralized retro play in the market and given the appetite for reinsurance-linked investments it could prove popular. It will be interesting to hear whether this is indeed factually accurate, how much is raised and whether it does list soon. If this is true then we’d imagine Montpelier Re would be planning to deploy capacity at the January renewals.
We can’t confirm any of this at this time apart from the existence of the Blue Capital Global Reinsurance Fund in the Bermuda register. We reached out to Montpelier Re and were told by a spokesperson that they have not made any announcement and that we would hear from them if or when they have anything to say. So we will update you should we hear anymore or be able to confirm this.