The pricing for shares issued in the latest capital raise for the Blue Capital Management operated, London Stock Exchange listed Blue Capital Global Reinsurance Fund has been set at $1.065 per share, it was announced this morning.
Blue Capital, the third-party capital and reinsurance-linked fund management arm of Bermuda based reinsurer Montpelier Re, is currently offering its third placing of new shares in the fund, under the terms of a Placing Programme announced on 17th April 2013. The last date for commitments to be received is the 25th of March and the results of the placing will be announced on the 26th.
This morning Blue Capital has announced a proposed placing price for the new shares of $1.065 each. The proposed price represents a premium of 2.8% to the net asset value of each ordinary share as at the 28th February.
Newly issued shares sold under this placing will rank equally with the rest of the funds ordinary shares for the next distribution of capital after the first half of this year. The distribution is expected to amount to $0.033 per ordinary share.
The proceeds raised from this latest share placement will be invested in fully collateralised reinsurance contracts and other insurance linked investments. The majority of the capital raised is expected to be invested in catastrophe reinsurance contracts at the June and July reinsurance renewals.
The fund achieved a total net asset value return including dividends to investors of 11.8% in 2013. The target return for the Blue Capital Global Reinsurance Fund is LIBOR plus 6% per annum on the original issue price of its shares and a net return to its shareholders of LIBOR plus 10% per annum, net of fees.
The Blue Capital Global Reinsurance Fund currently has total assets of approximately $178.9m and its latest share price at yesterdays close was $1.08, which is above the placing price. It will be interesting to see how much the fund grows at this placing and whether the growing profile of insurance linked and reinsurance linked investments has helped to broaden awareness of the asset class.
We will update you once details of the amount of shares sold and the capital raised from this latest share issue from the Blue Capital Global Reinsurance Fund are announced next week.