Two Sigma-Backed Insurer Seeks Takeovers as IPO Likely, CEO Saysby
`We're always looking,' Hamilton CEO Duperreault says
Duperreault seeks to add talent, data or geographic reach
Hamilton Insurance Group Ltd., the company backed by hedge fund firm Two Sigma, is seeking more takeovers as Chief Executive Officer Brian Duperreault builds a business that he expects to take public.
“We’re always looking. My job is to continually look for things that improve the company,” Duperreault said in an interview Thursday after speaking at a conference in New York sponsored by Reactions Magazine. He targets firms that would add capabilities, geographic reach, data or talent and said, “If that was there, I’d do it in a heartbeat.”
Duperreault’s firm bought Sportscover Underwriting Limited Ltd. this year to push into the the Lloyd’s of London market and acquired units from Fairfax Financial Holdings Ltd. in 2014 to provide primary insurance. His approach contrasts with hedge-fund linked firms such as Dan Loeb’s Third Point Reinsurance Ltd., which hasn’t made an acquisition since its 2013 initial public offering, and has said it would be tough to find a deal.
Two Sigma is a quantitative hedge-fund manager that oversees investments for Bermuda-based Hamilton. Duperreault, Two Sigma and other investors established Hamilton Insurance Group in 2013, the year it took over SAC Re, the reinsurer formed by Steven A. Cohen. Former Citigroup Inc. CEO Sanford “Sandy” Weill joined as chairman of Hamilton Insurance in 2014.
Reinsurance takeovers have accelerated this year. Investing firms such as China’s Fosun International Ltd. and Italy’s Exor SpA have struck deals to buy Bermuda-based companies. Reinsurers provide back-up coverage to primary carriers.
The flood of new money into the industry has pressured rates for existing firms, while portfolios have been squeezed by low bond yields and volatile investment markets. That has hurt firms such as Third Point Re, which has declined about 6.6 percent this year. David Einhorn’s Greenlight Capital Re Ltd. has tumbled 30 percent.
For Hamilton, an IPO is “a very likely possibility,” Duperreault said Thursday, without providing a time frame. He told the Royal Gazette of Bermuda in 2014 that an IPO could happen as soon as this year.
Duperreault previously led broker Marsh & McLennan Cos. and insurer Ace Ltd., and was an executive at American International Group Inc. when it was run by Maurice “Hank” Greenberg. Two Sigma was started in 2001 by David Siegel, a former chief technology officer at Tudor Investment Corp., and John Overdeck, a former managing director at D.E. Shaw & Co.
The Hamilton CEO said he has no intention of seeking a buyer for his company, even after Bermuda-based rivals such as Montpelier Re Holdings Ltd., Platinum Underwriters Holdings Ltd. and Ironshore Inc. agreed to takeovers.
“We sell insurance, but not ourselves,” Duperreault said.