Equity investors in the UK have put more than $100 million into Montpelier Re’s new Blue Capital Global Reinsurance Fund, which completed its first share offering this week.Montpelier provided $50 million of the $100 million allocated to the fund which is expected to be admitted to trading on the Specialist Fund Market of the London Stock Exchange and listed on the Bermuda Stock Exchange today.The Blue Capital Global Reinsurance fund will invest in a diversified portfolio of fully collateralised reinsurance-linked contracts and other investments carrying catastrophe-linked exposures.It is aiming to give shareholders annual returns of six percentage points above the London Interbank Offered Rate (LIBOR), the average rate at which banks lend to each other.This is just the latest example of mainstream investors seeking exposure to the reinsurance sector’s rising prices and relative immunity from financial shocks. At a time when more typical asset classes aren’t getting the returns investors are looking for, reinsurance-linked investment opportunities have become very attractive to large institutional investors like pension funds, sovereign wealth entities, hedge funds and other asset managers.Investors seeking to bypass the stock market have also been setting up their own reinsurance vehicles and buying specialist securities such as catastrophe bonds, which offer an income in return for agreeing to pay some of an insurers’ claims if a hurricane or earthquake strikes.Hedge fund managers Dan Loeb, Steve Cohen and John Paulson have all set up reinsurance companies in the past year, and Dutch pension fund PGGM, with some $152 billion under management, said in May it was putting more cash into catastrophe bonds.The industry is seen as relatively insulated from economic and financial slumps as demand for reinsurance generally holds up well during recessions.Some investors are also attracted to the reinsurance sector because costly natural disasters including Hurricane Sandy are expected to push up reinsurance prices when policies are renewed next year.“We expect the upcoming January 1 renewals to present us with a number of excellent opportunities to start deploying our capital,” Blue Capital chairman John Weale said in a statement.Montpelier Re clearly sees an opportunity to capitalise on the strong interest in the space to raise capital it can put to work underwriting more catastrophe risk business, splitting the premiums they earn with investors.“Montpelier has been successfully managing third-party capital since 2004, and Blue Capital represents the latest step in the expansion of our underwriting partnership business,” said Chris Harris, president and CEO of Montpelier. “Blue Capital broadens the product mix we can offer clients, and investors benefit from Montpelier’s long-established underwriting expertise and relationships.”