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SAC’s Cohen Follows Loeb and Einhorn in Starting Reinsurer for Capital

July 10, 2012 | About:
Dheeraj Grover

Dheeraj Grover

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Steven A. Cohen, the billionaire founder of SAC Capital Advisors LP, started a reinsurance company that can invest in his hedge fund, following Daniel Loeb and David Einhorn in entering the business to secure more permanent capital.

SAC Re Holdings Ltd. is being run by Simon Burton and will focus on high-margin catastrophe coverage and casualty protection, the Bermuda-based company said in a statement today. The company’s investments will be managed by SAC Capital, which oversees about $14 billion out of Stamford, Conn.

Cohen joins Loeb, the founder of Third Point LLC who started Third Point Re in Bermuda last year, and Einhorn, head of New York-based Greenlight Capital Inc., in creating a reinsurer to help secure money for his hedge fund that isn’t subject to investor withdrawals. Reinsurers, which help insurers shoulder risk and earn premiums that they invest to make a profit, have benefited from rising prices after record natural disasters last year.

“Third Point and Greenlight are leveraging more of the casualty business,” Burton, chief executive officer of SAC Re, said today in a telephone interview. “We agree that that’s a very compelling plan and it does form about 50 percent of the business that we plan to write. We think the addition of high quality uncorrelated property-catastrophe business is a further, very strong addition to the overall plan.”

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About the author:

Dheeraj Grover
I am an individual investor with deep interest in the field of value investing. My ideas and thinking is inspired by highly respected value investors like Ben Graham, Warren Buffett, Walter Schloss, Bill Ruane and Tweedy Browne

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