IRIS Dcg Iris Stg

TIDMIRIS

RNS Number : 6354M

DCG IRIS Limited

17 July 2014

DCG IRIS Limited (the "Company")

May Net Asset Values

As at 30 May 2014, the final net asset value of the Company's ordinary shares is as follows:-

Ordinary Shares

 
 Share class    Final NAV   MTD Performance   YTD Performance 
                  30 May     (Total Return)    (Total Return) 
-------------  ----------  ----------------  ---------------- 
 Sterling 
  shares         98.33p         +0.12%            +1.11% 
-------------  ----------  ----------------  ---------------- 
 

This valuation, which has been prepared in good faith by the Company's administrator, is for information purposes only and is based on the unaudited final valuation supplied by the administrators of the Company's underlying investment. Both a weekly estimate and a monthly valuation of the underlying investment may be produced as at valuation dates which do not coincide with valuation dates for the Company, may be based on a valuation provided as of a significantly earlier date, may differ materially from the actual value of the Company's portfolio and is unaudited or may be subject to little verification or other due diligence and may not comply with generally accepted accounting practices or other generally accepted valuation principles. The Company's administrator may not have sufficient information to confirm or review the completeness or accuracy of information provided by the administrators of the Company's investments.

Other risk factors which may be relevant to this valuation are set out in the Company's prospectus dated 12 November 2012.

Monthly Portfolio Review

Portfolio Commentary (provided by Credit Suisse AG, the manager of the Master Fund)(1)

Performance: The Company returned 0.12% (net of fees) in May, driven by the private transactions and cat bond positions. The cat bond portfolio showed larger mark-to-market losses during May mainly due to seasonal pricing patterns. These mark-to-market losses are typically recovered towards the end of the US hurricane season. As anticipated in last month's report, May was the month where several of the Florida cedents decided to bring deals to the cat bond market. Seven deals with around $3.2bn of notional closed over the course of the month. The team's focus for May was on the execution of the US renewal with the US hurricane season officially starting on 1 June 2014. We saw year-on-year price reductions of 15-20% in some sectors of the Florida market, primarily as a result of the lack of large loss events in the region as well as the abundant capacity being offered. As our investment strategy is less US-centric, we were able to participate more selectively in the renewal compared to other market participants.

Large Catastrophic Events: The continental US saw a series of severe hail and thunderstorms with aggregate insured losses estimated to exceed GBP2.2bn. The Balkans saw some of the heaviest rain in a century leading to extensive flooding in Serbia and Bosnia. Economic losses are expected to reach EUR3bn but insurance penetration in the area is very low. China also experienced heavy rain that led to flooding in southern parts of the country. The Ministry of Civil Affairs estimated economic losses at $1.2bn. While the full impact of these loss events is still uncertain, we do not anticipate an impact on fund performance at current industry loss levels. We will continue to monitor the impact of these events and keep investors advised of significant changes in insured losses in future reports.

Trading: There was some trading in both the cat bond primary and secondary markets with the net holding of cat bonds increasing. We also added some US exposure to the fund that we found to be well priced on an ILW basis, in addition to private indemnity transactions with US insurance and reinsurance companies.

Outlook: The team will be busy during June finalising the US renewal. We have noticed a slight uptick in the pricing in ILW markets and expect this trend to continue into July as US wind capacity becomes tight. The pace of issuance in the primary cat bond market should begin to taper over the next few months. 1 July is another important renewal date for Australia and New Zealand and the team is currently exploring opportunities in these markets. There will be significant trading activity for the fund in June and July to deploy free capacity towards attractive transactions. This should increase the portfolio yield to around 6.2% and position the fund well for the second half of the year.

(1)Portfolio commentary compiled at the end of the month being reported on.

Supplementary Information

Click on, or paste the following link into your web browser, to view a full review of the DCG Iris portfolio.

http://www.rns-pdf.londonstockexchange.com/rns/6354M_-2014-7-17.pdf

This information is provided by RNS

The company news service from the London Stock Exchange

END

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