investment oriented reinsurer

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.

Pricing in the casualty reinsurance space is expected to increasingly come under pressure owing to the presence of alternative capital, but it’s impact is unlikely to be as influential as seen in the property cat space, say analysts at Morgan Stanley.

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.

Fidelis Insurance Holdings, the hybrid underwriting and investment-oriented insurance and reinsurance firm launched by Richard Brindle and Neil McConachie has added a London underwriting operation to its platform, as it starts to acquire greater scale.

Enstar Group is backing a new hedge fund reinsurance style start-up named Aligned Re Ltd., which the firm will act as reinsurance manager for while also contributing $100 million of funding. The Aligned Re investment strategy is to be managed by UBS O’Connor LLC.

The investment returns generated by the two highest profile hedge fund manager backed reinsurance firms have returned to negative again in November, with Greenlight Re suffering another steep decline in the last month.

Market conditions see reinsurance firms struggle to generate desirable returns on the underwriting side of their balance sheets, leading Neil McConachie of Fidelis to ask why they aren’t writing less business and instead shifting capital to try to make a return on the investment side.

Two of the most prominent hedge fund reinsurance firms have seen an improvement in their investment returns in October, after two consecutive months of deeply negative returns due to financial market volatility.

Bermuda-headquartered insurance-linked securities (ILS) management, servicing, transformation and fronting specialists Horseshoe Group, has launched a new platform which targets asset managers seeking to establish hedge fund investment oriented reinsurers more simply.