Investors in the CATCo Reinsurance Opportunities Fund Ltd., the London stock exchange listed retrocessional reinsurance-linked investment fund, have approved the latest return of value proposal at a general meeting held yesterday.
The Board of the CATCo Reinsurance Opportunities Fund Ltd. proposed earlier in January a return of value of $35m, which equates to approximately 10% of the fund’s market capitalisation at a price of $1.157 per Existing Ordinary Share on 31 December 2014.
The Return of Value is a separate capital distribution and in addition to the fund’s targeted annual distribution dividend. It is a way that the managers of the CATCo fund can return capital after another year of good performance, where the fund remained largely loss free. It also demonstrates discipline, as the managers of the fund chose once again to return capital to investors rather than seek to deploy more into potentially lower priced renewals.
The fund, which is operated by reinsurance and retrocessional reinsurance-linked asset manager CATCo Investment Management, deployed its fully collateralised retrocessional reinsurance capacity at the January renewals at rates which are above its targets for 2015, setting it up for another good year.
At the meeting yesterday the fund’s shareholders agreed to the return of value and the related share capital consolidation.
CATCo is one of the largest collateralized retrocessional reinsurance markets in the world, with over $2.5 billion of assets under management. Investors in its London-listed fund have been continually benefiting from strong returns, regular dividends and these additional returns of capital, as the managers look to ensure investors profit while the market remains largely loss free.