Blue Capital Global Reinsurance Fund Limited, the Montpelier Re backed listed catastrophe reinsurance linked investment fund, has published its first prospectus in its push to raise more funds. As we wrote back on the 21st March here, Blue Capital will pursue a series of placings of new shares in the fund to accommodate new investor inflows as part of a capital-raising push in the run up to the mid-year reinsurance renewals.
The prospectus, published this morning, is the start of the first of the proposed series of new share placements and was expected to launch in Q2. The proceeds of the fund-raising and share placement, which the prospectus says could be up to $250m in size, will be invested in “fully collateralised reinsurance-linked contracts and other investments carrying exposures to insured catastrophe event risks,” according to the announcement.
New shares created through this raise and placement will be admitted for listing on both the London Stock Exchange and the Bermuda Stock Exchange. This first placement will be for Ordinary shares that will be ranked equally with existing Ordinary shares and will have a placement price of $1.02 per share. The last date for receiving commitments from investors is expected to be the 2nd May, so the shares will list soon after that date.
Since its launch, the Blue Capital Global Reinsurance Fund has deployed $66.9m of the $100.1m raised in its initial public offering. The balance is held in cash and Blue Capital aims to deploy it at the upcoming June and July reinsurance renewals. The company expects to deploy all of the remaining cash from the IPO along with the capital raised in this round by the 1st July and says that it remains on track to achieve that goal.
Blue Capital Global Reinsurance Fund targets an annualised dividend yield of LIBOR plus 6% per annum on the original issue price of the Ordinary Shares at launch and a net return to Shareholders of LIBOR plus 10% per annum over the longer term, net of fees.
We’ll update you as and when we hear the results of this fund-raising push.