Hedge fund reinsurer news

Bermuda domiciled insurer and reinsurer Validus saw its share of income from AlphaCat Managers Ltd., its third-party capital manager, increase during the first-quarter of 2016 to $8.7 million, helping the firm grow its gross written premiums in the period.

Harrington Re Ltd., the start-up total return style reinsurance venture from re/insurer AXIS and alternative asset manager Blackstone, will have a flexible investment strategy, helping it to optimise both sides of the balance-sheet, after it completes a proposed capital raise of $850m.

At the end of the first-quarter of 2016 the two leading proponents of the hedge fund reinsurance firms continued to show that, when it comes to navigating the financial market investment environment, not every strategy is equal.

Watford Re, the investment-oriented, total return reinsurance joint venture operated by Bermudian re/insurance group Arch Capital alongside asset manager Highbridge Principal Strategies, has launched a U.S. domiciled surplus lines insurer, Watford Specialty Insurance Company.

Collateralized reinsurance firm Oxbridge Re reported a decline in net income for the final quarter of 2015, owing to poor performance on the investment side of its portfolio, as financial market volatility continues to challenge the non-traditional investment strategy.

The hedge fund reinsurance strategy continues to demonstrate its volatility in 2016, as the two main proponents of the strategy, backed by leading hedge fund managers, see their performance diverge as Greenlight Re outperforms Third Point Re again in February.

The size of the investment loss suffered by hedge fund backed reinsurance firm Greenlight Re could not be avoided in its quarterly and annual results, dragging the David Einhorn backed reinsurer to a $43.1m net loss for the fourth-quarter of 2015.

As expected the investment performance of Watford Re, the investment-oriented, hedge fund partnered, hybrid strategy reinsurance joint venture vehicle between Arch and Highbridge, was negatively affected by financial market volatility in the fourth-quarter of 2015.

Financial market investment volatility and a challenging reinsurance landscape negatively impacted the performance of hedge fund backed reinsurers during 2015, but internal hybrid, investment-oriented vehicles continue to gain momentum, according to Fitch Ratings.

The value proposition of an ILS and third-party reinsurance capital manager operated from within a global insurance and reinsurance group, such as seen with AlphaCat as part of Validus, is attracting investors to change their ILS manager, according to CEO of Validus Ed Noonan.