hedge fund

The performance of hedge fund reinsurers diverged in the opening months of 2016 following investment market volatility. Consistently being outperformed by traditional reinsurers Standard & Poor’s (S&P) questions the longevity, and success of the hedge fund reinsurance business model.

Third Point Re, the Bermudian reinsurance firm backed by Daniel Loeb’s Third Point LLC hedge fund, has come out on top after the second-quarter when the firms investment portfolio return far outperformed the other main hedge fund reinsurer Greenlight Re.

Bermuda based total return reinsurance firm Third Point Re has renewed its investment management agreements with Daniel Loeb’s Third Point LLC for a further five years, and added an agreement between the reinsurers U.S. arm and the hedge fund manager.

Fortunes of the two main hedge fund reinsurance strategy proponents, David Einhorn backed Greenlight Re and Daniel Loeb backed Third Point Re, have reversed in the second-quarter to-date, with Einhorn’s Greenlight Re suffering an investment loss, while Loeb’s Third Point Re reported positive returns.

Over the first-quarter of 2016 the results of the two main hedge fund backed reinsurance firms diverged, both on underwriting and investment returns, as Einhorn backed Greenlight Re reported a profit, while Loeb backed Third Point Re fell to a loss.

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.

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 differences in hedge fund reinsurance investment portfolios was again evident in the first month of 2016, with Greenlight Re reporting a positive investment return, while Third Point Re fell to an investment loss in January.

Both of the leading and highest profile hedge fund manager backed reinsurance firms have suffered a full year investment loss in 2015, as the volatile financial market climate impacted on the investment oriented reinsurance strategy.

Multi-Strat Holdings, owner of the MultiStrat Re platform that enables asset managers such as hedge funds to more easily get into the reinsurance business, has added a new member to its board of directors in Raymond O’Neill, principle of ARC Directors (Ireland) Ltd.