Swiss Re Insurance-Linked Fund Management

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CATCo considering additional distribution to reinsurance fund shareholders


The Board of the CATCo Reinsurance Opportunities Fund Ltd., a London stock exchange listed retrocessional reinsurance-linked investment fund, is considering giving its investors an additional distribution of capital or income if the year remains largely loss free.

The CATCo Reinsurance Opportunities Fund, operated by reinsurance and retrocessional reinsurance-linked asset manager CATCo Investment Management, is on course for a record year if the current 2013 loss experience continues to the end of 2013. To date there have been no major insured losses which have affected the funds 2013 investment portfolio, meaning the fund has made an attractive return.

The Board of Directors of the fund said that they wanted to highlight to investors that they are considering the viability and mechanics for an opportunity for shareholders in the fund to receive an additional distribution over and above the funds annual target dividend equivalent to LIBOR + 5% of net asset value.

The update from the fund says that the exact nature of any additional distribution has not yet been determined and it’s not guaranteed to occur as yet. If a distribution is made it will take the form of an income and/or capital distribution to shareholders in the CATCo fund. It is expected that if a distribution is forthcoming there will be a further announcement in early January.

CATCo has seemingly had a very good year in 2013 and is on track for its best annual return to date to its funds shareholders. The fact that the investment manager is considering returning additional capital earned from a good year to investors will be pleasing to shareholders. Of course the year is not over yet so shareholders will have to wait to see if the rest of December remains free of significant losses for CATCo’s reinsurance fund.

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