Hedge Funds Find Reinsurance Isn’t Always Reassuring

Hedge fund firms that set up reinsurers as a source of permanent capital are finding that when the performance of their main funds falters, so does the performance of the reinsurance vehicles tied to them.

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Hedge fund managers have been attracted to the offshore reinsurance business as a way to raise permanent capital since the 1990s, and investors have followed them, seeking access to otherwise closed funds.

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