Multi-Strat Re Ltd., the Bermuda based reinsurance venture that seeks to enable asset managers, such as hedge fund managers, to enter the market with less friction, has added another asset manager to its ranks in Crabel Capital Management LLC.
Los Angeles based Crabel Capital Management has registered and launched its own Bermudian Class 3A reinsurance firm, Crabel Re Ltd., through which it aims to underwrite reinsurance business and invest the premium float in the asset managers short-term systematic trading strategy, Crabel Multi- Product.
Crabel Capital has an investment management agreement with Crabel Re, but the reinsurer will leverage the Multi-Strat Re platform for its underwriting and reinsurance operations. This allows Crabel Capital to enter the reinsurance market more simply, while focusing on the investment management side of the business. Multi-Strat Re is designed to assist asset managers to enter the reinsurance space, while also enabling them to break away and become independent reinsurers in future if they choose.
“Reinsurance offers a unique opportunity to raise capital and manage assets for the firm. Our goal is always to provide the best possible products and services to our clients and reinsurance will provide one more option moving forward,” commented Toby Crabel, Founder and CEO of Crabel Capital Management.
Crabel Capital is a global alternative investment firm, focused on futures and foreign currency trading and as pioneers of short-term trading, the firm offers its investors broadly diversified systematic products with low correlation to traditional asset classes. Founded by Toby Crabel in 1992, the firm now manages $1.7 billion for its institutional client base.
Taussig Capital Ltd. advised Crabel Capital on the entry to the reinsurance market, while Middlebury Securities, Ltd, a FINRA regulated investment bank, provided capital advisory support.
The Multi-Strat Re platform model provides an opportunity for asset and hedge fund managers to get into the reinsurance business with lower friction, reducing the barriers to entry. It ultimately offers investors a way to access reinsurance industry returns boosted by the investment strategy of the asset manager and gives the asset manager new sources of more permanent capital.
It’s an interesting model which will prove very attractive to some investors who prefer less underwriting risk and are happy to take a little more risk on the investment side. For the asset managers it allows them get up and running in reinsurance more easily, while also providing them the option of jumping off the platform in future and turning their reinsurer into a private, going concern.