Third Point Reinsurance, which was founded by Daniel Loeb and others, filed to sell $250 million worth of stock in an initial public offering, according to a regulatory filing. Loeb’s New York-based hedge fund firm, Third Point, manages substantially all of the Bermuda company’s investable assets. The amount Third Point Reinsurance eventually seeks to raise, however, could change substantially.
Loeb, who managed $13.5 billion in assets as of May 31, is one among at least four hedge fund managers to head up a reinsurer. The others are Greenlight Capital’s David Einhorn, SAC Capital Advisors’ Steven Cohen and Paulson & Co.’s John Paulson. The idea is that the reinsurance assets are permanent capital that is not subject to potential redemptions. However, Loeb also stands to benefit from some tax advantages for his investment gains.
JPMorgan Chase & Co., Credit Suisse Group AG and Morgan Stanley are the lead underwriters for the IPO. According to the filing, Third Point Reinsurance plans to use the net proceeds from the offering for general corporate purposes, including the costs associated with being a public company. It also said it intends to increase its underwriting capacity “in order to support the growth of our reinsurance premium writings.” Any additional surplus “will be invested consistent with past practice pursuant to the terms of our investment management agreement with Third Point LLC.”
Right now, private equity firm Kelso & Co. owns about 33.6 percent of the outstanding common shares, Pine Brook Road Partners LLC owns 16.9 percent of the shares and Loeb Entities own 10.8 percent. According to the filing, J. Robert Bredahl, chief financial officer and chief operating officer of Third Point Reinsurance, earned more than $13.2 million in 2012, including more than $5.3 million from the value of options awards and another $5.675 million in restricted stock awards. John R. Berger, chief executive and chief underwriting officer, earned $10.69 million.
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Separately, Third Point Offshore Investors has gained 2.1 percent this month through July 10. This brings its full-year gains to 16.8 percent in its U.S. dollar shares and 18.3 percent in its sterling shares.
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New York-based hedge fund firm Elliott Associates has extended its standstill agreement with Compuware to September. It was previously scheduled to terminate on July 15. The sometime-activist hedge fund, which owns 5.7 percent of the stock, entered into a confidentiality agreement with the business software company on February 14, which was initially scheduled to expire on May 15, after Compuware rejected Elliott’s takeover offer.
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Herbalife’s stock surged 6.67 percent Monday, closing at a new all-time high of $52.30. The stock is now up nearly 60 percent in the calendar year alone. The stock is a major short position for Bill Ackman’s New York-based hedge fund firm Pershing Square Capital Management.
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The Credit Suisse Hedge Fund Index fell 1.66 percent in June. This lowered its full-year gain to 3.68 percent. The best performing strategy for the first half of the year was distressed, up 8 percent, while long-short equity gained 7 percent. The worst performer was dedicated short bias, down 12.35 percent, followed by managed futures, down 3.59 percent.
