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Investment returns boost Third Point Re

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Strong investment performance has boosted Bermuda headquartered reinsurance firm Third Point Reinsurance Ltd’s share price, after the hedge fund backed reinsurer reported attractive returns from its investment assets managed by hedge fund Third Point LLC.

Third Point Re reported a return on its investment assets of 2.5% for September and 17% for the year 2013 to date. Substantially all of the investment and premium income received by Third Point Re is deployed in reinsurance underwriting or invested in strategies by manager Dan Loeb’s Third Point LLC hedge fund.

Now that Third Point Re is a publicly listed company, since its IPO and listing on the New York Stock Exchange, the reinsurer will be expected to report the performance of its investment account at Third Point LLC. This will also give some insight as to the performance of Dan Loeb’s hedge fund as well.

Bloomberg reported today that the better than expected investment results caused analysts at Keefe, Bruyette & Woods to raise their earnings estimate for Third Point Reinsurance shares. This caused a bounce in the Third Point Re share price which rose by 3% earlier today.

Now that Third Point Re is listed the performance of its invested assets at Third Point LLC are even more important as transparency requirements will dictate that they are available for all investors to scrutinise. Of course equally important will be the reinsurers underwriting results, as the better they are the more float is available to invest in the hedge fund strategies.

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