Portfolio Update (4613Z)
January 14 2011 - 2:00AM
UK Regulatory
TIDMCAT
RNS Number : 4613Z
CATCo Reinsurance Opps Fund Ltd
14 January 2011
CATCo Reinsurance Opportunities Fund Ltd.
Reinsurance Portfolio Update
To: SFM, London Stock Exchange Date: 14 January 2011
CATCo Reinsurance Opportunities Fund Ltd. (the "Company")is
organised as a feeder fund to invest substantially all of its
assets in the CATCo Reinsurance Fund Ltd.'s segregated account,
CATCo Diversified Fund (the "Master Fund"). Further to the launch
and subsequent admission to trading on the London Stock Exchange's
Specialist Fund Market on December 20, 2010, the Board of Directors
are pleased to provide an update concerning the deployment of the
Company's investment strategy following the retrocession renewal
season which occurred on January 1, 2011.
CATCo Investment Management Ltd., the appointed investment
manager, in conjunction with CATCo-Re Ltd. ("CATCo"), a licensed
Class 3 Reinsurance Company through which the Master Fund gains
access to all of their reinsurance risk exposures, have agreed
terms of several reinsurance transactions that have deployed $77.4
million, representing 96.3% of the Placing Proceeds raised on
December 20, 2010. Each contract has a duration of 12 months and
are due to expire on December 31, 2011. The risk period of each
Reinsurance Agreement commenced on January 1, 2011. The remaining
assets have been held in cash.
Each Reinsurance Agreement entered into by CATCo, on behalf of
the Master Fund, contains several non-correlated pillars of risk.
At the date of this announcement, all Reinsurance Agreements
written by CATCo are fully collateralized with highly liquid
securities, namely, AAA-rated money market funds or short term US
Treasury Bills which reside in Reinsurance Trust Accounts with the
Bank of New York and whom act as Trustee.
Reinsurance Portfolio Diversification: The Master Fund's
reinsurance portfolio contains a broad mix of risk pillars at
January 1, 2011. The Master Fund's diversified portfolio ensures
that exposure to a single loss event, no matter the magnitude of
the event, results in minimal erosion of capital, if any.
Risk Pillar %age exposure
European Wind 3%
Japan All Natural Perils 3%
Rest of World Specified Perils 3%
CA Quake 6%
US excluding CA Quake 6%
Marine Non-Elemental 6%
Gulf of Mexico Wind 6%
Northeast Wind 6%
Florida 2nd Event Wind 6%
Japan / Caribbean Quake 8%
Europe All Natural Perils 8%
US / Canada Quake 11%
US / Caribbean Wind 11%
2nd Events on all pillars above 17%
Reinsurance Portfolio Projected Returns:
The Board maintain their expectation that they will be able to
achieve an IRR of LIBOR plus 12% - 15% per annum. Additionally, any
new capital raised in the Q1 2011 can be readily deployed into
reinsurance contracts that both further diversify the portfolio and
enhance overall returns, based on reinsurance demand for the
Company's product offering.
The Company's Monthly Insight can be obtained from
www.catcoim.com/products.html.
For further information, please contact:
Jason Bibb
CATCo Investment Management Ltd
Telephone: +1 441 531 2227
Email: jason.bibb@catcoim.com
David Benda / Hugh Jonathan
Numis Securities Limited
Telephone: +44 (0)20 7260 1000
- ends -
This information is provided by RNS
The company news service from the London Stock Exchange
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