Shares in CatCo Reinsurance Opportunities Fund have fallen throughout the year as the retro specialist has advised on loss deterioration from 2017 cat events despite Belisle demonstrating his confidence in the business by acquiring shares in its two listed funds.
However, on Friday (7 December) CatCo’s ordinary shares slumped 44 percent to 18 cents following another further loss update while also disclosing that it is facing “US and Bermuda government enquiries” over its reserving policies.
The fund’s C shares - which were issued in Dec 2017 and have no exposure to 2017’s losses - fell 22 percent to close at 45 cents on Friday. They were issued at $1.
Former Oxygen broker and Goldman Sachs executive Belisle launched CatCo in late 2010 and the firm has become a leading provider of low layer, multi-event retro protection to small-to-medium sized cat reinsurers.
It now has over $6bn of assets under management after raising an impressive $2.3bn from investors a year ago following 2017’s Hurricanes Harvey, Irma and Maria. But it raised the funds after initially predicting it could still make a 2017 profit despite the Q3 2017 storms. However, since then, it has updated its loss estimates throughout the year and now says its funds lost the equivalent of 57.1 percent of its 2017 NAV.