We reported earlier this week here that Prudential plc had shown a growing appetite for investments in catastrophe risk and reinsurance after it participated in the recently closed second share offering from the Montpelier Re backed Blue Capital Global Reinsurance Fund Limited. Regulatory filings show that Prudential are not the only asset manager that picked up a large allocation to Blue Capital in this placement.
The second share offering from Blue Capital, and the first in 2013 with another likely later this year, Blue Capital increased the size of its flagship fund by 51,250,000 shares or approximately $52m, to $152.38m with 151,350,000 Ordinary shares now in circulation.
The Prudential plc group of companies took almost a fifth of the latest share placement by the Blue Capital Global Reinsurance Fund, snapping up 10 million of the 51,250,000 new Ordinary shares, which at the placement price of $1.02 per Ordinary share would have cost $10.2m.
Other large asset managers have also participated in the recent share offering, with two of them taking reasonably sizeable allocations in the fund.
First, AXA Investment Managers S.A. who already held 5m shares in Blue Capital Global Reinsurance Fund, has added a further 3.5m shares at the recent placement. The holding of 8.5m shares, which may be held by any nominees or funds under AXA Investment Managers control, gives AXA Investment Managers 5.62% of the fund which at $1.03 per share at the most recent close values AXA’s holding at around $8.755m.
The other asset manager who significantly grew its holding in Blue Capital’s fund was Investec Asset Management Ltd. Investec was a first-time investor in the Blue Capital Global Reinsurance Fund at the recent offering and purchased 9,843,135 shares, giving it 6.5% of the fund. Investec’s holding is indirect as it is held within certain nominees or funds under its control. Investec’s 6.5% holding in Blue Capital Global Reinsurance Fund is worth approximately $10.14m.
Stock exchange listed ILS and reinsurance-linked funds, such as Blue Capital’s offering, are proving very popular with some of the larger asset managers of the world, particularly in the UK and Europe. They see allocations to reinsurance and catastrophe risk as a good diversifying and low-correlating asset to hold within their own fund and investment offerings, as well as being clearly attracted by the returns catastrophe risk and ILS can offer.