DCG IRIS Limited DCG IRIS Limited December 2013 Monthly Report (9302Z)

TIDMIRIS

RNS Number : 9302Z

DCG IRIS Limited

12 February 2014

DCG IRIS Limited (the "Company")

December Net Asset Values

As at 31 December 2013, the final net asset value of the Company's ordinary shares is as follows:-

Ordinary Shares

 
 Share class     Final NAV     MTD Performance   YTD Performance 
                 31 December    (Total Return)    (Total Return) 
-------------  -------------  ----------------  ---------------- 
 Sterling 
  shares           99.74p          +0.28%            +4.93% 
-------------  -------------  ----------------  ----------------

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 0.28% (total return, net of fees) in December, with performance driven by our private transactions. The primary cat bond market saw five deals close during the month, with the outstanding (non-life) market volume reaching a new record of $18bn by the end of the year. The focus during December was the January 1 renewals, at which time a majority of the world's insurance and reinsurance markets renew their contracts. With a lack of significant large loss events in 2013, premiums in the reinsurance market are expected to continue to soften. Our approach going into this renewal season has been to target strategic partners in the space with whom we have deployed significant line sizes and to leverage these strong relationships to obtain preferential pricing terms. We have started early conversations with our counterparties to temper cedent pricing expectations, and will provide a full update on recent trading in the January report as we expect these renewals to be finalised in early 2014.

Large Catastrophic Events: December saw a series of winter storms tracking across Europe, the largest of which were Xaver and Dirk. Windstorm Xaver moved across Northern Europe bringing hurricane force winds, heavy rains and some of the highest recorded coastal tides in decades. Insured losses were estimated at roughly $1.1bn. Between 23 and 25 December, windstorm Dirk brought wind gusts and heavy precipitation to parts of Western Europe. The UK, France and Spain were the worst affected, with significant flooding reported in these countries. Industry loss estimates from this event currently stand at $500m. The US and Canada bore the brunt of a broad storm system that brought severe winter weather to large swathes of the region. We will continue to monitor the impact of these events and keep investors advised of significant changes in insured losses in future reports. While the full impact of these loss events is still uncertain, we do not anticipate an impact on fund performance at current industry loss estimates.

Trading: During December, the fund added some primary cat bond exposure in order to replace maturing deals.

Outlook: We are seeing pricing in relation to the January 1 renewals varying depending upon the territory of the renewal. We anticipate that underwriting discipline will be key strategically to negotiating these renewals; a willingness to walk away from programmes and markets where year-on-year pricing is unattractive from a risk-adjusted perspective will be essential to maintaining this discipline. As stated earlier, leveraging our longstanding relationships will also be important and will help to provide a beneficial outcome to both parties to the transactions. As is typical with the January 1 renewals, we expect that cedents will look to place their traditional programs first and then seek to fill gaps by making strategic private purchases later in the first quarter.

(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/9302Z_-2014-2-12.pdf

This information is provided by RNS

The company news service from the London Stock Exchange

END

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