Montpelier Re to boost ILS fund as demand grows
The Montpelier Re-backed Blue Capital Global Reinsurance Fund, which invests in catastrophe exposed collateralised reinsurance-linked contracts and other ILS investments, is looking to raise more funds through a series of placements of new shares. One market participant said the placement illustrated the still growing demand for ILS products among investors.
The fund, which was launched in December last year raising more than $100 million, has said it expects the share placements to begin in the second quarter of 2013. Managed by Montpelier Re’s investment management subsidiary Blue Capital Management, the fund invests in a number of products including collateralised reinsurance-linked contracts, industry loss warranties, catastrophe bonds and other insurance-linked securities.
The news of the fund’s expansion comes as a number of new catastrophe bonds are being marketed – further illustrating the growth of this sector.
Florida state-backed insurer, Citizens is looking to repeat the success of its first cat bond issued in 2012, with a second bond issuance under Everglades Re. Everglades Re made headlines in 2012 when it became the largest cat bond ever, growing from a $200 million tranche of notes to $750 million by the close of the deal.
State Farm & Casualty is looking to launch Merna Re IV, a $250 million three-year deal that will provide it with US earthquake protection. Meanwhile, Guy Carpenter and Munich Re are reportedly working on Tar Heel Re, which would give the North Carolina wind pools – the North Carolina Joint Underwriters Association and the North Carolina Insurance Underwriters Association – three years of hurricane protection.
It was also recently announced that New York investment firm Stone Ridge Asset Management has successfully raised its initial target capital for its two insurance-linked securities (ILS) and reinsurance-linked investment funds. The manager launched two reinsurance-linked funds in the last quarter of 2012, as reported on this news service, and completed its first round of fundraising by the end of January.
