London Stock Exchange listed, Montpelier Re operated, reinsurance linked Blue Capital Global Reinsurance Fund, has reported an increase in its net asset value for the first-half of 2014 of approximately 1.0%, after the impact of dividends declared.
The fund, which is managed by Blue Capital Management, the third-party capital and reinsurance-linked investment management arm of Bermuda based reinsurer Montpelier Re, reported an NAV increase of 0.47% for the first-quarter, so Q2 has slightly outpaced that start of the year.
The Funds market capitalisation at the end of June 2014 sat at over $187m, of which $179.5m is invested in the Master Fund. 89% of this capital is currently deployed across a diverse portfolio of reinsurance linked investments and preferred shares of Blue Water Re Ltd., which in turn has deployed $160m of funds across 57 different positions and 45 different clients, according to the half-yearly report.
The bulk of the remaining deployable capital was invested in further preferred shares issued by Blue Water Re during July and August 2014.
During the first half of 2014, the NAV of the funds shares increased by approximately 1.0% after the impact of dividends declared. Blue Capital Global Reinsurance Fund aims to provide returns to investors through a combination of capital appreciation and dividends.
The NAV per Ordinary Share moved from $1.0751 at 31 December 2013 to $1.0416 per share, with a $0.044 per share dividend declared in January. The funds Ordinary Shares traded at an average premium to their Net Asset Value of 3.0%.
The fund saw exposure to a couple of attritional losses during the first-half, primarily related to tornadoes in the U.S. in May and June, as well as a very small impact from European storms in June, had a combined impact of approximately US$0.005 per Ordinary Share. The fund also saw an impact during the half of US$0.005 per Ordinary Share due to reinsurance premium adjustments during the first-half.
The fund forecasts its next dividend payments will remain in line with expectations and notes that as much of its portfolio is currently deployed in U.S. wind related risks most of the premiums are earned between July and October, so performance could be stronger when the third-quarter is reported.
With much of its capital currently deployed, the manager Blue Capital will continue to look for opportunities to improve the funds portfolio and to position it for the upcoming January renewal season. There is also the possibility of more share placements, should demand encourage the fund to look for more capital, with resolutions at recent AGM’s allowing a new placing programme to be established if the manager sees fit.
The full half-year report from the Blue Capital Global Reinsurance Fund can be found here.