15 August 2014 Alternative Risk Transfer

CATCo posts solid results; de-risks portfolio

CATCo Reinsurance Opportunities Fund, the reinsurance and retrocessional reinsurance fund, reported a solid performance in its portfolio in the six months of 2014 with no significant insured losses incurred on the portfolio.

This was both a result of the relatively low level of catastrophe events in addition to de-risking the 2014 portfolio, it said.

As well as benefitting from a lack of catastrophes the fund has also de-risked its portfolio because of what it described as challenging market conditions.

It also has maintained that there is an optimum level of capital required to meet its return targets, having returned some capital through a return of value in January and a share buyback in May.

Its net asset value capital return for the first six months was 4.27 percent, whilst the respective return for its original ordinary shares issued on December 20, 2010 was 7.27 percent following the contingent distribution paid in relation to the 2011 Tohoku, Japan earthquake.

The share price capital return was 4.01 percent. The company's share price stood at a premium of 0.26 percent to NAV at 30 June 2014.

The company remains on track to reach a targeted LIBOR plus 12 percent to 15 percent per annum in 2014, as long as no significant losses affect its portfolio.

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