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Markel CATCo proposes compulsory buy-backs of listed retro fund shares


Retrocessional reinsurance investment manager Markel CATCo is proposing to make compulsory redemptions or buy-backs of some of the remaining shares of its listed and in run-off investment strategy the CATCo Reinsurance Opportunities Fund Ltd.

Markel CATCo logoMarkel CATCo Investment Management has been managing the run-off of its retrocessional reinsurance fund strategy over recent months, returning capital where it has been able to through a reverse tender offer and a series of share buy-backs.

In order to expedite that process across the rest of the fund’s outstanding and in issue shares for which cash is now available, to accelerate the running off of the structure and return capital faster to investors, Markel CATCo is now proposing a compulsory redemption of some of the remaining shares.

With capital returning to the fund after contracts go out of their risk period, some side-pocketed share value is returned where losses turn out to be lower than had been reserved for, as well as other factors, Markel CATCo is looking for the best way to expedite the return of this to investors to speed up the run-off of this fund.

As a result, the Board of the CATCo Reinsurance Opportunities Fund has concluded with the help of advisers that the best way to achieve this is to conduct compulsory redemptions of shares at the prevailing net asset value (NAV) price for each of its Ordinary and C share classes.

As a result, the Board is publishing details of its proposal in a circular and will seek the approval of shareholders at special meetings.

If approved this should significantly speed up the process of running-off this retro reinsurance investment fund for Markel CATCo, enabling the manager to shutter this listed fund structure and move on with the rest of the running-off of its business.

Currently there is $24.2 million of cash available to repay to investors in the fund, of which 90% will be returned (so $21.78m) with the remainder set to be retained for expenses.

The rest of the fund’s capital is held in sidepockets at the moment, but as some is released that will also be returned to investors.

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