Alts. Down Insurance Cos.’ Portfolio

Oct 15 2008 | 11:53am ET

The lackluster performance of hedge funds has also had a negative affect on institutional investors, specifically insurance companies. Publicly traded insurance concern Max Capital Group said its overall investment portfolio for the third quarter fell 2.85%, leaving it down 2.19% for the year.

Specifically, Max Capital’s loss on its alternative investments is expected to be 12.93% for the quarter and 11.97% for the year. The company’s alternative investments represented approximately 20% of its total invested assets of approximately $5.2 billion as of the end of June.

As a result, Max Capital said it has decided to reduce its allocation to alternative investments to 10% to 20% of invested assets from the 15% to 25% current range. In addition, the company plans on increasing the number of strategies employed and managers within the alternative investment portfolio, employing a less volatile, more market neutral benchmark to monitor risk and measure relative returns, and reduce exposure to the asset class over the next two quarters to the mid-point (15%) of the its new allocation.

“Worsening market conditions—third quarter hedge fund returns were the worst since benchmarking became available—necessitated an acceleration of that review, and we initiated a series of fund redemptions in the third quarter of 2008 to rebalance our portfolio in accordance with our updated investment strategy,” said Marston Becker, CEO of Max Capital.

In Depth

Financial Industry Blockchain Consortium R3 To Open-Source Platform Code

Oct 20 2016 | 9:03pm ET

Bitcoin's blockchain technology has spawned a flurry of activity among fintech startups...


U.S. Trust's Beard: The Rapid Growth of the Art Lending Industry

Oct 7 2016 | 10:55pm ET

Alternative investment managers have emerged as some of the most significant art...

Guest Contributor

Hedge Fund Marketing – Tips for Your Initial Sales Meeting

Sep 29 2016 | 5:46pm ET

There are two main goals a hedge fund should have for an initial in-person sales...