DCG IRIS Limited DCG IRIS Limited March 2014 Monthly Report (8904G)

TIDMIRIS

RNS Number : 8904G

DCG IRIS Limited

12 May 2014

DCG IRIS Limited (the "Company")

March Net Asset Values

As at 31 March 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 
                 31 March    (Total Return)    (Total Return) 
-------------  ----------  ----------------  ---------------- 
 Sterling 
  shares         99.33p         +0.25%            +0.85% 
-------------  ----------  ----------------  ----------------

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 0.25% (net of fees) in March, driven by the private transactions. During the month there was $1.1bn (notional) of cat bond issuance in the primary market, with five deals closing over the course of the month. While most of these deals were exposed to risks in the US, one Japanese earthquake bond brought some diversification to the market. The focus for March, as discussed in last month's report, was on the execution of the Japanese renewals. While the market in Japan saw a tightening of spreads, pricing pressure was less severe than at the January renewals and pricing is coming down from elevated levels post the earthquake in 2011. We are pleased with our renewals experience in Japan, especially in the current market, where several reinsurers struggled to maintain their market share. Our successful renewals are testament to our long standing relationships and commitment to the Japanese market. The illiquidity in the ILW market continued, with very little being traded on a synthetic basis.

Large Catastrophic Events: On 8 March 2014, Malaysian Airlines flight MH370 disappeared while crossing the South China Sea, carrying 227 passengers and 12 crew members. While the investigation into the disappearance of the aircraft is ongoing, current reports indicate that the plane is likely to have crashed in the Indian Ocean. The fund has no exposure to aviation risk, so we do not expect an impact from this event.

Trading: The fund added some cat bond exposure in both the primary and the secondary markets. As discussed above, most of the other investments added to the master fund portfolio related to the Japanese renewal but will only be on risk from 1 April.

Outlook: The team will be busy over the month of April finalising contracts in relation to the Japanese renewal. In addition, planning for the US wind season and the June and July renewals has begun in earnest. We are also currently evaluating some private transaction opportunities in northern Europe. We expect to see a steady stream of new cat bonds coming to the market over the next few months in the run-up to the US wind season. We have seen significant spread compression in some sections of this market and expect this trend to continue as demand for cat bonds continues to outstrip supply. As a result, we will only participate in new issues where we find value relative to other instrument types.

(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/8904G_-2014-5-12.pdf

This information is provided by RNS

The company news service from the London Stock Exchange

END

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