Swiss Re Insurance-Linked Fund Management

Original Risk: A Society for Change Agents

CATCo raises additional $121m to take advantage of rising retrocession rates


CATCo, a specialist Bermuda based investment manager who operate the London listed CATCo Reinsurance Opportunities Fund, announced yesterday that they have successfully raised an additional $121.1m (after commissions and expenses) through the issuance of over 124m C-shares with institutional investors. The offering was the first from a proposed placing of 400m new shares.

As we reported in April, CATCo have seen current reinsurance market conditions as an opportunity to capitalise on rising retrocession rates and offer enhanced returns to their shareholder investors. This initial share issuance will give CATCo additional funds to write a portfolio of risk in the upcoming renewals at the increased rates. CATCo also seek to diversify their portfolio further with the new capital which should help them to attract new investors seeking the returns reinsurance investment can offer.

In a smart move CATCo have corralled any potential exposure to recent catastrophe events (such as the Japanese and New Zealand earthquakes) so that new investors after April 1st have not inherited any exposure to potential losses in the new shares. CATCo continue to say that they don’t expect any losses from these events to impact the firm. Protecting new investors from major loss events in this way will certainly have helped them to attract investors to the offering.

An application has been made to list the new C-shares on the Specialist Fund Market of the London Stock Exchange and CATCo expect that admission to the exchange will take effect on the 20th May.

Full details of the results of the new share issuance are available on the CATCo website.

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