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Markel CATCo begins listed retro fund share buybacks


As part of its efforts to run-off its portfolios of retrocessional reinsurance and return capital to its investors, Markel CATCo Investment Management has executed its first share buyback for the exchange listed ILS fund CATCo Reinsurance Opportunities Fund Ltd.

Markel CATCo logoThe Board of the Markel CATCo managed retro reinsurance fund had previously recommended an orderly run-off of the fund’s portfolios of retrocessional reinsurance risk investments, which shareholders voted in favour of.

The return of capital began recently, when almost $16 million was set aside to be returned to investors in the ILS fund by way of an interim dividend.

That capital was redeemed from the CATCo Master Fund, that this listed retrocessional reinsurance strategy allocates its funds to, with the majority returned in the dividend and the rest held for the start of share buybacks.

Following that and after going ex-dividend, the investment manager has now put some of the remaining redemption proceeds to work in buying back the first lot of shares from investors.

Markel CATCo’s listed fund company has bought back 425,000 Ordinary Shares from its ILS fund, at an average price of USD 0.195 per share on October 24th.

Which only totals $82,875 of the outstanding fund holdings, but buying back shares means that the shares need to be available to purchase from their existing holders, so the process could take some time and we suspect there will be regular share buybacks over the coming months as a result, ramping up as more of the redemption proceeds are received, as retro reinsurance positions in the portfolio come off-risk and can be liquidated.

Markel CATCo had $7.972 million available to carry out share buybacks in the market following, its first redemption of assets in the Master Fund. That capital could take some time to return through share buybacks it seems, unless the pace picks up.

After this first buyback was executed, the Markel CATCo listed retro reinsurance fund had 769,796,238 shares left, consisting of 314,750,952 Ordinary Shares and 455,045,286 C Shares.

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