Two Sigma Frontrunner For SAC Re

Oct 17 2013 | 2:50pm ET

Quantitative hedge fund Two Sigma Investments is the likely buyer of SAC Capital Advisors' reinsurance business.

The New York-based firm is in exclusive negotiations with SAC over the hedge fund's stake in SAC Re, Insurance Insider reports. Under the deal, the Bermuda-based reinsurer would invest its premiums in Two Sigma funds, as it currently does with SAC, giving Two Sigma a source of permanent capital.

According to Insurance Insider, former Marsh & McLennan CEO Brian Duperreault is involved in the discussions, although it is unclear whether he is merely advising Two Sigma or whether he would be involved in the business after a deal.

SAC is moving to sell or close its year-old reinsurer after being hit with criminal insider-trading charges. The hedge fund informally approached several firms about buying SAC Re; it is unclear whether Two Sigma was among them. SAC, firm founder Steven Cohen and private-equity firm Capital Z Partners set up the reinsurer last summer with $500 million in initial capital.

SAC is currently in talks to settle the insider-trading charges; any deal with prosecutors would likely see the firm barred from managing outside capital, such as SAC Re's.

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