There’s further evidence of why reinsurance and insurance linked securities (ILS) are such a popular investment strategy right now.CATCo Investment Management, a Bermuda-based reinsurance-linked investment business who manages about $2 billion of retrocessional reinsurance portfolios for its clients, says it expects its fund, the CATCo Reinsurance Opportunities Fund, to deliver a net return in excess of 20 percent this year.Impressive results for the company’s investors when compared to other investment assets and strategies as not many funds will achieve 20 percent returns in the current economic climate.The forecast was however, caveated with the statement that achieving more than 20 percent would only be possible if there are no major catastrophe events over the rest of 2012.CATCo’s chairman, Anthony Taylor said it’s a level of return they hope to maintain into the next year. The forecast did however, come with one caveat."Following 2011 being one of the worst years of all time for the insurance industry the fund currently expects to deliver a net return in excess of 20 percent in the current year,” Mr Taylor said."Looking forward we believe the fund will maintain its well diversified portfolio of risk at current levels with the expectation for similar or even slightly better returns in 2013."With the company’s strategy of writing top-layers of reinsurance and retro programs they have access to high return business which can deliver excellent returns to their investors. With their highly diversified, pillars of risk approach, they hope to be diversified enough to deliver positive returns even under extreme catastrophe loss situations.