Ex-Citadeler Belisle Launches Catastrophe Fund

Dec 20 2010 | 10:30am ET

A Citadel Investment Group veteran has launched a catastrophe risk fund, called the first listed vehicle of its kind.

CatCo’s Reinsurance Opportunities Fund raised US$80 million on the London Stock Exchange. The firm will invest directly in extreme catastrophe risks and is targeting returns of between 25% and 15% over Libor. CatCo will have a variety of catastrophe exposures, limiting its exposure to a single catastrophic event to 20% of assets, the Financial Times reports.

The Bermuda-based firm is headed by Tony Belisle, who helped create collateralized reinsurance contracts during his days at Citadel. The fund is backed—and CatCo is owned—by Qatar Insurance Company, which put up US$25 million. Other investors included the Co-operative Insurance Society and Henderson Global Investors, who each invested US$16.1 million, Baillie Gifford, which invested US$8 million, and JPMorgan Asset Management, which invested US$6.5 million.

CatCo is still planning an open-ended hedge fund. That vehicle could raise as much as US$1 billion, the FT reports.

The new firm’s success on the LSE follows Catlin’s abandonment of a planned listed fund investing in fully-collateralized reinsurance contracts. Catlin gave up its bid to raise £150 million due to lack of demand.

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