Hedge fund reinsurer Resource Re’s parent lists on TSX

by Artemis on April 25, 2014

Till Capital Ltd., the new parent company of Resource Re Ltd. which was the first hedge fund style reinsurance firm to join the Multi-Strat Re Ltd. platform in September 2013, has now listed its shares on the TSX Venture Exchange.

Earlier this year in February we wrote that the reinsurer and its holding company, Resource Holdings Ltd., were to be acquired by Americas Bullion Royalty Corp., a firm which invests in what it believes to be undervalued natural resource assets to provide superior investment returns to its shareholders.

On January 6th of this year, American Bullion Royalty Corp. announced its intention to acquire the securities portfolio of Kudu Partners, L.P., which is the hedge fund managed by investor Bill Lupien and the asset manager behind reinsurer Resource Re.

The idea was to create a diversified investment led company aiming to have superior access to capital and markets than others in the resource sector. Adding a reinsurer into the mix will allow the new holding company to capitalise on, and continue to invest, the premium float generated by Resource Re’s reinsurance business.

Under the agreement Resource Holdings has changed its name to Till Capital Ltd. the shares have now been listed on the Toronto Stock Exchange Venture Exchange.

Till Capital Ltd. reports its assets as:

  • Over CAD$35 million in cash and securities; and
  • Approximately 55 separate royalty interests, including deeded and option royalties;
  • Ownership of all of the issued and outstanding shares of Resource Re Ltd., which holds a Class 3A insurance license in Bermuda;
  • Assuming completion of the proposed subscription, on a private placement basis, of common shares of Silver Predator Corp. (“SPD”) (see AMB news release dated March 25th, 2014), ownership of up to 83,000,000 shares of SPD, representing approximately 64% of the issued and outstanding shares of SPD, assuming no additional shares are issued by SPD;
  • Ownership of 14,963,584 shares of Golden Predator Mining Corp. (“GPY”), representing approximately 54% of the issued and outstanding shares of GPY, assuming no additional shares are issued by GPY;
  • Ownership of 6,000,000 shares of Wolfpack Gold Corp. (“WFP”), representing approximately 12% of the issued and outstanding shares of WFP, assuming no additional shares are issued by WFP; and
  • Ownership of Cuesta del Cobre, S.A.; interest in the Adelaide, Tuscarora and Carlin Vanadium Projects in Nevada, USA; and
  • Approximately 160 oz of gold bullion.

A very mixed and diverse strategy, we’re sure you’ll agree.

Till puts reinsurance first and foremost in its mission statement though, suggesting that the importance of the premium float generated by Resource Re in this mix cannot be understated.

Till Capital merges talented teams to lead a unique Bermuda-domiciled company primarily engaged in the reinsurance business, supported by ancillary investments in royalties and equity holdings in the resource sector. This non-traditional approach creates a company with diversified investments and significant upside potential, well-positioned for future growth through access to and strategic deployment of capital. Till brings together a key technical team from the financial and market side with the specific engineering, mining, metallurgical and geological expertise.

Resource Re Ltd. will continue to underwrite low-volatility, conservative reinsurance business, allowing Till Capital to benefit from a stream of premium income which can be put to work in its various investment strategies, taking into account the duration delay between premiums coming in and claims being paid out.

Resource Re will continue to be part of the Multi-Strat Re Ltd. platform, which gives it access to reinsurance business as part of a pool of reinsurers, lowering the frictional costs to start-up. It will still benefit from the premium flows, taking a quota share of the business written at Multi-Strat Re, along with other participating reinsurers.

So Resource Re shows another stage in the asset manager or hedge fund backed reinsurance strategy, as the first reinsurer from the Multi-Strat Re platform to be acquired and list on a stock exchange. This shows just how attractive the hedge fund or asset manager backed reinsurance model is to firms looking for a source of investment capital and could encourage other diversified corporations, which have investments as one part of their business, to look seriously at reinsurance as a source of stable and more permanent capital inflows.

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