Lloyd’s investor Hampden plots capital raising

Lloyd’s capital provider Hampden Underwriting is planning to raise equity capital, it revealed in its full-year 2011 results.

The company made a modest loss of £387,000 in 2011 (2010: profit of £132,000) as a result of its exposure to natural catastrophes and UK motor business. The company provides capital to global Lloyd’s (re)insurers Hiscox, Beazley and Catlin as well as motor writer Equity Syndicate Management.

Hampden chairman Sir Michael Oliver said the company had a good start to 2012, but said this was not reflected in the company’s share price as “we are far too small”, and the stock price is subject to large swings when anyone buys or sells stock.

“It was always our intention to endeavour to raise fresh capital to enable us to do more of what we are currently doing but only when the time was right. That time is now,” Oliver said. “We are involved in continuing discussions with our advisers about raising capital which will of course involve giving you, our existing shareholders, the opportunity to participate. We hope to be able to tell you more about these plans in the near future.”

As a result of the 2011 loss, Hampden’s net asset value fell to £7.5m (£1.01a share) from £7.9m.

Commenting on the loss, Oliver said:  “Whilst it gives me no pleasure to be reporting a loss in 2011, that has to be looked at in the context of the year being the second worst on record for catastrophe losses.”

He added: “That said your company was well placed to deal with the loss and remains well capitalised to take full advantage of the improved conditions that inevitably follow losses of such severity and indeed diversity.”