CATCo exchange-listed retrocession fund to be wound up

As the Markel CATCo retrocessional reinsurance investment portfolio story begins to draw towards its natural run-off conclusion, the Board of the London listed fund entity is seeking shareholder approval for a winding up of that specific strategy.

As we reported last week, the CATCo Reinsurance Opportunities Fund Limited, which is the London-listed retro reinsurance investment fund operated by Markel CATCo, announced a further share redemption.

With that partial compulsory redemption of shares due to complete on November 29th, the Board of the CATCo Reinsurance Opportunities Fund are now moving towards the next stage in the process, a full winding up.

After this latest redemption of shares is completed, the CATCo fund will have redeemed the entirety of its interests in the CATCo retrocessional reinsurance Master Fund, while substantially all of the redemption proceeds it it received will have been distributed to shareholders.

As a result, the Board has determined to recommend a voluntary winding up of the London and Bermuda exchange listed investment entity.

Shareholder approval is needed and will be sought at a special general meeting to be held on December 18th.

Liquidators will be appointed and a typical process will be followed, with all service provider arrangements terminated. A cash reserve built-up at the company will be used to pay the majority of costs it seems, while any remaining value will be distributed to shareholders after the liquidation is completed, which is expected to be in the first-quarter of 2025. After which the shares will be delisted and cancelled.

So, the CATCo story moves towards its close, with positions largely now run-off and investors having recovered what value has been unlocked through that process.

For Markel, it will free some resources and time, as well as any final value available to the company from the buy-out of shares it effected a few years ago.

While the saga is coming to an end, there remain unanswered questions and many in the insurance-linked securities (ILS) market will be pleased to see this drop from the news cycle in due course.

We’ve reported on CATCo since the start, find all our coverage here.