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Alternative Market Briefing

Reinsurance companies offer a source of permanent capital for hedge fund managers

Wednesday, August 07, 2013

Bailey McCann, Opalesque New York:

In October, Opalesque first reported on the launch of Taussig Capital, which launched a reinsurance platform for hedge fund managers interested in opening that business line. Some big names in the hedge fund world run reinsurers – Buffet, Einhorn, Loeb, Paulson. Indeed, the reinsurance arm of Daniel Loeb’s Third Point, recently disclosed that it was seeking to raise up to $370.6m from its forthcoming initial public offering.

According to the Joe Taussig, founder and CEO of Taussig Capital, the benefits for the manager include permanent capital, which is what attracts them. For investors there are benefits too, "if it gets publically traded like Greenlight or Berkshire are, they get daily liquidity. Greenlight trades about $4 million worth of shares a day. Greenlight trades at the premium to book value, so you not only compound and higher our lease, because of the business than the fund would, but you get the premium to book value and daily liquidity," he explains in a recent Opalesque TV interview.

Fund managers can see their reinsurance business outperform their own f......................

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