CatCo Investment Management, who launched in Bermuda earlier this year, has successfully become the first to list a dedicated catastrophe investment vehicle on the London Stock Exchange. The CatCo Reinsurance Opportunities Fund raised $80m from investors.
It’s the first successful listing of a catastrophe investment fund on the LSE. Catlin attempted similar earlier this year but failed to get off the ground. CatCo Reinsurance Opportunities Fund will be managed by the Tony Belisle run investment management fund. The main investor in the fund was Qatar Insurance Company who have invested $25m (they also hold a large, perhaps controlling stake in CatCo Investment Management), other investors include Co-operative Insurance and Henderson Global Investors who each put in $16.1m, Baillie Gifford put in $8m and JPMorgan are said to have invested $6.5m.
The fund aims to offer investors an easy way to access a non-correlated investment opportunity in collateralised reinsurance (which may include insurance-linked securities, insurance linked swaps and industry-loss warranties). They will invest in a range of catastrophe exposures and the fund will not have more than 20% of its assets exposed to a single type of peril.
Anthony Taylor, chairman of CATCo Reinsurance Opportunities Fund Ltd. said; “CATCo is breaking new ground by bringing fund managers new and exciting investment opportunities in the re-insurance market which are otherwise difficult to access. We are extremely pleased to have such high quality and high profile initial investors in the CATCo Reinsurance Opportunities Fund.”
Tony Belisle, Chief Executive Officer of CATCo Investment Management Ltd. said; “The cash collateralised product is appropriate security for the extreme catastrophic events which makes it an attractive product to reinsurance buyers and the uncorrelated nature of the asset class makes for a suitable addition to any diversified investor portfolio.”
The high profile launch of this fund, with coverage in most major European newspapers including the FT should ensure that it is widely known and will help to get the investment community talking about catastrophe risk as a potential asset class. After the strong year in the insurance-linked securities investment market we expect this fund to be in demand. Other fund managers will be watching this closely to see if opportunities and demand exists to list further funds on the LSE.