Third Point Reinsurer Plans Major Catastrophe Fund

Sep 14 2012 | 1:23pm ET

Third Point's year-old reinsurance business debuted a year ago with $500 million. Now, its seeking to more than double that with a new property and catastrophe fund.

Third Point Re, which is based in Bermuda, plans to raise $250 million by the end of the year for the new business. And CEO John Berger says that's just a start—he hopes it can grow to "$500 million to $600 million," and, "if we can get to that and establish a track record, then over time maybe we can make it bigger."

Berger told the Royal Gazette that the cat fund has already secured "one significant investor" whom he plans to identify shortly. He said the new fund would be relatively conservative in its approach.

"Because of the aggressive investing, we really can't put super-volatile business on the Third Point balance sheet, so we have a minimal amount of property cat business," Berger said. "But one of the main purposes of reinsurance is to provide cat capacity. So we're going to start a separate cat fund to be able to write that business."

Third Point Re already has a small catastrophe "side-pocket," a $50 million vehicle launched in April and led by former Goldman Sachs cat fund manager Manoj Gupta. The company has been on something of a hiring spree and plans to launch a London subsidiary shortly.

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