Markel CATCo gets majority investor support for improved buy-out terms

Markel CATCo Investment Management has gained support from a majority of investors in its listed retrocessional reinsurance investment fund for the improved terms of the buy-out offer and an extension of the Support Undertakings to 31st March 2022.

We reported last week that the terms of the Markel CATCo buyout proposal had been sweetened, after a new settlement was reached with some investors that had objected previously.

Now, the directors of the CATCo Reinsurance Opportunities Fund, the London-listed retrocession strategy, have said that after requesting consent for the improved terms from those investors that had previously signed Support Undertakings, a majority approved these changes.

The improved terms effectively will deliver more capital to investors holding shares in the fund and this reads-across to the private CATCo retro fund strategies as well.

Markel Corporation is set to pay the full costs of the increased buy-out offer, so no reduction to the amounts recoverable for investors will be made.

Now, with support gained for these improved buy-out terms and the extension to the lifespan of the Support Undertakings also confirmed, the proposed schemes for winding down the CATCo Reinsurance Fund Ltd. and CATCo Reinsurance Opportunities Fund Ltd. are confirmed and the process will continue.

It’s not yet clear how much support there is from the private CATCo fund investors, but it is also likely to have increased with the improvement to the terms.

Meanwhile, as we reported earlier this week, the outlook for the buy-out has also continued to improve, as Markel CATCo Investment Management recovered more value for its investors, thanks to favourable development related to 2017 and 2018 catastrophe loss events.

The whole run-off process is certainly taking longer than Markel would live, given the ongoing need to gain additional confirmation from investors. But with another hurdle cleared, the end is nearing and progress continues to be made.

Also read:

Markel CATCo buy-out terms sweetened after settlement reached.

Belisle fraud lawsuit to wait for CATCo insolvency decision in Bermuda.

CATCo retro fund gains again, NAVs now 148% & 231% higher than lows.

Markel CATCo buyout support undertakings extended to end of February 2022.

Markel CATCo says court decision on buyout hoped for in January.

Markel CATCo to “vigorously defend” investor challenges.