Swiss Re Insurance-Linked Fund Management

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Markel CATCo buys-back 1m shares in listed fund


Retrocessional reinsurance specialist investment manager Markel CATCo has bought back 1 million shares in one of the classes of its stock exchange listed fund.

The C class of shares in the CATCo Reinsurance Opportunities Fund had been trading at a discount to net asset value, which suggests that the manager has bought back these shares to demonstrate its confidence in the strategy.

In buying back the 1 million of C class shares, Markel CATCo is perhaps suggesting that its own analysis indicates the discount to NAV is too high.

The buy-back could help to boost the share price a little, particularly as the shares will be cancelled and withdrawn from circulation as a result.

Markel CATCo purchased the shares at a price of 98 cents per share, which is actually slightly above where the C shares sat as recently as the 19th.

As we explained yesterday, the share prices had fluctuated on the threats posed by recent global catastrophe events, such as hurricane Florence and typhoon Mangkhut, having been priced as high as $1 dollar per share as recently as September 7th.

The discounted price is clearly evident after the August NAV announcement this week, which showed that the C class shares NAV had actually risen 3.42% at $1.0914.

But despite this the shares have been priced well below that NAV, at a discount of as much as 17%.

Hence this buy-back is likely Markel CATCo looking to demonstrate its commitment to the strategy and belief that the discount is too wide, despite any uncertainty over potential catastrophe event impacts.

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