CATCo Reinsurance Opportunities aims to give its shareholders the opportunity to participate in the returns from investments linked to catastrophe reinsurance risks, principally by investing in fully collateralised reinsurance contracts but also via a variety of insurance-based investments, including insurance-linked swaps and industry loss warranties, insurance-linked securities as well as other financial instruments.
The fund will target an internal rate of return in excess of LIBOR plus 12 percent to 15 percent per annum including a distribution by way of dividend in respect of each Fiscal Year, of an amount equal to LIBOR plus 5 percent of the Net Asset Value at the end of each Fiscal Year.
CATCo Reinsurance Opportunities intends to spread investment risk by seeking exposure to several non-correlated risk categories which limits the amount of capital at risk with respect to a single catastrophic event.