Hedge Funds Go After Reinsurers

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Aug. 14 (Bloomberg) -- Investors in Third Point Reinsurance’s initial public offering are betting on billionaire hedge fund manager Daniel Loeb. They’re also taking on risk from an unprofitable underwriting operation. Noah Buhayar has more on Bloomberg Television's "Money Moves." (Source: Bloomberg)

They will get a small reinsurance company that uses most of its investment portfolio and hands it over to dan loeb and his hedge fund.

Dan loeb is not the only well-known hedge fund manager.

There is a pretty long list of hedge fund managers that happened to have reinsurance.

You have john paulson, david einhorn, steve: all have reinsurance companies.

The reasons for it are a couple.

One is that it can be a more permanent source of capital.

There are some tax benefits.

The other thing is that if they do a good job, they can get a really low or no cost point of leverage.

What is the track record of the others that might give us an indication on how loeb is going to do?

Once we know with david einhorn, they have been around, they went public in 2007. they have done a pretty good job.

They had an issue last year with some contracts they wrote on commercial motor vehicles.

Dump trucks, garbage haulers, things like that.

That did not pan out too well.

For paulson, loeb,:, we don't have much information.

What about the pricing?

How does this stack up to what we have seen in the past?

If loeb's company prices in the midpoint of the range, it would be pretty much on par with green light.

So, right in the middle.

Any indication of the proceeds?

Like you said in the intro, the main idea is to boost underwriting capacity and they will also be a public company.

Thank you very much.

We are joined with the very

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