Swiss Re Insurance-Linked Fund Management

Original Risk: A Society for Change Agents

CATCo shares redeemed as investors get their exit


Shares have been redeemed in the public and stock exchange listed CATCo Reinsurance Opportunities Fund, as investors in the strategy finally get to realise the remaining value and exit the retrocessional reinsurance investment strategy.

Markel CATCo logoThe exit point, through a buy-out of all shares in the CATCo retro reinsurance fund strategies, was only possible after the negotiation and funding support given by parent Markel CATCo.

The buy-out scheme officially closed on March 28th, with distributions of value from the private CATCo insurance-linked securities (ILS) funds then beginning.

Today, the public and listed CATCo Reinsurance Opportunities Fund announced that yesterday it effected a partial compulsory redemption of shares, buying back the vast majority of holdings in the fund.

147,812,056 Ordinary Shares were redeemed from investors at a rate of USD 0.349957 per Ordinary Share and 82,398,091 C Shares were redeemed at a rate of USD 0.653616 per C Share.

It’s not quite the entire fund, as 1,493,131 Ordinary Shares and 832,376 C Shares now remain in issue.

In total, 99% of the issued share capital of the listed CATCo retro reinsurance investment fund was redeemed, with capital proceeds of the buy-out now set to be returned to investors in the strategy on April 11th.

Investors have effectively been locked-in to the CATCo retro strategies for some time now, with the negotiations over the buy-out itself having taken months.

Markel proposed a buy-out that it provided funding for back in September 2021, with the idea being to speed a resolution and return of capital to shareholders, allowing the parent to focus on running-off the retro reinsurance portfolios.

Now, with the buy-out almost completed and distributions of value set to be returned to investors next week, the process is nearly over and Markel can concentrate on extracting as much value out of the run-off process as possible, with any upside set to be shared with the CATCo investor base as well.

As we said before, the share price NAV the buy-out has been implemented at represents an almost 145% increase in value since the lows for the Ordinary share class and 241% for the C share class, a significant recovery in valuation and of shareholders invested capital.

In addition, the threat of any future litigation was removed thanks to necessary court approvals and bankruptcy support being received, meaning Markel can move forwards and put the CATCo venture behind it.

Also read:

CATCo buy-out scheme closes, distributions to investors begin.

CATCo buy-out gets US court approval, Belisle lawsuits to be dismissed.

CATCo buyout schemes sanctioned by Bermuda Court.

CATCo investors vote “overwhelmingly” in favour of buyout.

Markel CATCo funds seek US bankruptcy support for buyout.

Markel CATCo sets buy-out meeting date. End of process in sight.

Former CATCo CEO Belisle’s fraud lawsuit stayed as settlement negotiated.

Bermuda Court orders CATCo creditor meetings be held.

CATCo retro funds head back to Bermuda Court this week.

Markel CATCo gets majority investor support for improved buy-out terms.

CATCo reports favourable development on 2017 & 2018 catastrophes.

Markel CATCo buy-out terms sweetened after settlement reached.

Belisle fraud lawsuit to wait for CATCo insolvency decision in Bermuda.

CATCo retro fund gains again, NAVs now 148% & 231% higher than lows.

Markel CATCo buyout support undertakings extended to end of February 2022.

Markel CATCo says court decision on buyout hoped for in January.

Markel CATCo to “vigorously defend” investor challenges.

Artemis Live - ILS and reinsurance video interviews and podcastView all of our Artemis Live video interviews and subscribe to our podcast.

All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance video content and video interviews can be accessed online.

Our Artemis Live podcast can be subscribed to using the typical podcast services providers, including Apple, Google, Spotify and more.

Print Friendly, PDF & Email

Artemis Newsletters and Email Alerts

Receive a regular weekly email newsletter update containing all the top news stories, deals and event information

  • This field is for validation purposes and should be left unchanged.

Receive alert notifications by email for every article from Artemis as it gets published.