Markel CATCo in bankruptcy. Danish pension PKA revealed its main holder


Markel CATCo Investment Management, the run-off reinsurance reinsurance manager of insurance-related securities funds (ILS), faces Chapter 15 bankruptcy proceedings, with deposits made to states United who also disclosed the Danish pension fund investor PKA A / S as a major holder.

Chapter 15 bankruptcy proceedings typically involve a foreign entity that affects US financial interests or owns assets or businesses in the United States.

Bankruptcy filings provide an element of protection for those involved in the liquidation of an entity, such as Markel CATCo and its retrocession reinsurance investment funds and reduce the risk to creditors, which is likely the cause of the filing because the manager wishes to repay the capital as smoothly as possible for his remaining investors.

The brief details the process that Markel CATCo and its funds must follow in connection with the proposed buyout that was recently announced.

This proposal saw Markel CATCo Investment Management and Markel Corporation seek to expedite the return of capital from CATCo’s retrocessional reinsurance investment funds to investors, while avoiding any complications associated with the continued flow of legal claims, parent company Markel being prepared to fund a significant amount of capital to support the process.

Bankruptcy protection will play a role in helping to secure the process and ultimately fund assets for investors if the buyout process is approved.

The filing with the Southern Bankruptcy Court of New York also provides some very interesting information about the major holders of the CATCo retro reinsurance investment funds at present.

The file should include an example of the corporate structure of the debtors, in this case Markel CATCo and its fund structures, as well as a list of all creditors who have a 10% or more interest in any of the entities.

Markel CATCo Reinsurance Fund Ltd., the private fund and master of the CATCo structure, is listed as having a particularly significant owner, the Danish pension fund manager PKA A / S.

PKA A / S (or Pensionskassernes Administration A / S) is the Danish pension fund manager for the labor market pension funds in the country, therefore manages investments for four pensions mainly related to the health sector.

PKA has been an investor in CATCo’s strategies since at least 2015, but some pension funds it manages are now listed at 40% of the Markel CATCo Reinsurance Fund Ltd. which is a particularly important participation.

It is not clear from the bankruptcy filing how much PKA’s 40% stake is, but with the CATCo reinsurance opportunities fund listed as 12% owner of the private / master CATCo fund, it seems likely that PKA’s participation is still relatively large. figure.

The Danish pension had its own mandate as part of the CATCo strategy, in our opinion the CATCo PKA fund, which had to be of a reasonable size for the pension to now be listed at 40% in the main investment structure of the CATCo strategy.

The main holders of the listed strategy, the CATCo Reinsurance Opportunities Fund, are also detailed, with investment managers Weiss Asset Management holding 33.79% of C shares and Almitas Capital holding 24.90% of C shares.

Both also own ordinary shares of the listed investment fund CATCo, Almitas Capital holding 20.65%, Weiss Asset Management 18.96%, Baillie Gifford 10.89% and Aberdeen Standard Investments 10.48%.

Only holders with a stake of 10% or more must be declared in the bankruptcy filing.

Liquidation proceedings have been filed in Bermuda and will run alongside the bankruptcy arrangements, while investor support is sought for the proposed buyout transaction.

Bankruptcy proceedings play an important role in the process, protecting the interests of investors in the United States and providing a formal backdrop for the liquidation of offshore entities.

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