hedge fund

Greenlight Re, a Cayman Islands domiciled hedge fund strategy reinsurance firm backed by David Einhorn’s Greenlight Capital, Inc., has again seen a quarterly loss due to its investment strategy, but the premiums written at the reinsurer continue to grow.

The Association of Bermuda Insurers and Reinsurers (ABIR) has submitted comments in response to the U.S. Treasury Internal Revenue Service’s proposed rules targeting the perceived tax issue associated with hedge fund reinsurance strategies.

Bermuda is seeking to ready itself to be considered as a “third-country,” or non-European Union, with passport rights under the Alternative Investment Fund Managers Directive (AIFMD), a move which would benefit local ILS funds and managers.

Insurance and reinsurance rating agency A.M. Best said that it does not expect any impact to any reinsurance firm’s it provides ratings for as a result of the recently introduced offshore, or hedge fund targeting, reinsurance tax legislation.

Legislation has been introduced by Oregon Senator Ron Wyden stipulating rules under which a hedge fund or hybrid investment / underwriting reinsurance firm would have to ensure a certain percentage of its assets were allocated to underwriting at all times.

In current form, the U.S. Treasury Internal Revenue Service’s proposed rules for Passive Foreign Investment Companies (PFICs) could impact a number of alternative risk, reinsurance and ILS structures and activities.

Nephila Capital, the largest fund manager in the insurance-linked securities (ILS) and reinsurance-linked investment space, has been selected as a sub-advisor for a second multi-asset class mutual fund operated by Blackstone Alternative Asset Management.

San Francisco based private equity investor Golden Gate Capital has seed funded a new reinsurance company, Nassau Reinsurance, with up to $750m of start-up funding, further demonstrating the attraction to reinsurance as investment opportunity.

Greenlight Re, the Cayman Islands domiciled hedge fund reinsurance firm backed by David Einhorn’s Greenlight Capital, Inc., has fallen to a first-quarter loss as investment losses at the hedge fund weighed on results.

The U.S. Treasury Internal Revenue Service has now published a draft rule (link to the draft at the bottom) on the perceived tax issue associated with hedge fund reinsurance strategies, but is asking for comments and feedback to help it ensure it accurately identifies those taking advantage of any loophole.