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Capital Returns Management's stake in Assured Guaranty jumped 400% in Q4'17

Capital Returns Management LLC made a huge bet on Assured Guaranty Ltd. in the fourth quarter of 2017, boosting its stake in the bond insurer more than 400% during the period, an analysis of Capital Returns' latest 13F filing reveals.

After reducing its stake by 77.41% in the third quarter, Capital Returns bought 640,057 additional shares of Assured Guaranty. Assured Guaranty's share price declined during the fourth quarter, falling from $37.75 per share on Oct. 2, 2017, to $33.87 on Dec. 29, 2017. The asset manager owned 800,000 shares with a market value of $27.1 million as of Dec. 31, 2017.

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The company also increased its positions in Genworth Financial Inc. and Federated National Holding Co. by 41.04% and 25.28%, respectively. The asset manager's Genworth stake was worth $4.1 million at the end of the quarter, while its Federated National shares were valued at $16.7 million.

Capital Returns initiated three insurance positions worth $40.3 million during the quarter. By market value, Everest Re Group Ltd. was the largest, at $20.1 million. The two other additions were Validus Holdings Ltd. and Maiden Holdings Ltd., worth $18.0 million and $2.2 million, respectively.

At the end of 2017, Capital Returns recorded its total financial institutional holdings' market value at $322.0 million, down 6.25% compared to the prior quarter.

Capital Returns reduced its positions in 12 companies during the quarter. The largest decrease was in Progressive Corp. stock, with the sale of 129,301 shares. Capital Returns owned 150,000 shares worth $8.4 million as of Dec. 31, 2017.

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The asset manager exited its stakes in four insurance underwriters and a broker during the quarter. The positions had an aggregate market value of $74.2 million as of Sept. 30, 2017.

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