Cat reinsurance fund Blue Capital Alternative Income to be wound down
Shareholders representing 39 percent of the equity have voted against the continuation of the Blue Capital Alternative Income Fund at the annual general meeting and the company’s board is recommending an orderly run-off of the company.
“In light of the results, the board intends to recommend an orderly run-off of the company at a special general meeting of shareholders to be held at the earliest practicable date,” according to a regulatory statement.
Blue Capital Alternative Income Fund is a London-listed closed-end fund launched in 2012 and provides institutional and retail investors with the opportunity to access the global catastrophe reinsurance market.
In April 2018, investor Staude Capital sent a letter to the board of directors of Blue Capital Alternative Income Fund saying that it is in the best interests of shareholders to vote against the continuation of the company.
“Given the poor market rating that the shares of the company have attracted for some time, we commend the board for giving shareholders an opportunity to vote on whether the company should continue,” the letter said.
Staude Capital noted that for the past three years the share price of the company has traded at a continuous and unacceptable discount to net asset value (NAV). It argued that at its present size the company is a markedly subscale investment proposition for both new and existing shareholders. Furthermore, since the initial public offering in 2013 through to April 20, 2018, shareholder total returns have been a negative 5 percent.
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