Shareholders approve liquidation of Blue Capital London-listed ILS fund

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Shareholders have voted to approve the liquidation and running off of the London exchange listed Blue Capital Alternative Income Fund insurance and reinsurance linked investment strategy, at a special general meeting held today.

Back in May, the Board of the fund, which is managed by insurance-linked securities (ILS) and collateralized reinsurance investment fund manager Blue Capital Management, a subsidiary of Sompo International Holdings Ltd. recommended that the portfolio be run-off and put the future of the strategy to the vote.

The vote has now been held and the future of the fund is now clear, the Blue Capital Alternative Income Fund portfolio of reinsurance contracts will be put into run-off and the fund liquidated.

Votes representing 78.6% of the funds ordinary shares were taken and the outcome was the overwhelming majority voted for the liquidation of the fund to begin.

As a result, the company said that Mike Morrison and Mark Allitt of KPMG Advisory Limited are named as joint liquidators, with the power to wind up the fund’s affairs and to realise and distribute its assets to shareholders.

The company now intends to cancel its listings on the London and Bermuda stock exchanges as of tomorrow.

The Blue Capital Alternative Income Fund recently halted all new investments as the management awaited the outcome of today’s shareholder vote. The fund had a net asset value of roughly $130 million, with investments valued at over $104 million in the master fund Blue Capital Global Reinsurance SA‐1, as well as collateral of $25.9 million held in trust relating to expired or loss affected contracts.

The reconciliation of contracts and recovery of value for shareholders will now begin and so this reinsurance-linked investment strategy will be wound down over the coming months.

The winding down of this strategy will now free up Blue Capital Management to concentrate on its other, much larger, collateralized reinsurance and retrocession fund strategies.

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