Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

What do Dan Loeb and David Einhorn Have in Common?

Daniel Loeb is an American hedge fund manager and founder of Third Point LLC. Prior to founding the firm, he graduated from Columbia University and worked at Citicorp. He recently started a reinsurance company that can invest in his hedge fund to seek more permanent capital.


David Einhorn is President of Greenlight Capital, a long-short value-oriented hedge fund, which he began with $1 million in 1996. Einhorn started his reinsurer in 2004 and started writing insurance a year later.

Dan Loeb follows Einhorn in creating a reinsurer as a way to raise capital for his hedge fund. Reinsurers are paid a reinsurance premium for the risk transferred to them from the insurers.

Third Point Re is based in Bermuda and has about $500 million capital. It hired John Berger as the chief investment officer, who has almost 30 years of experience in the reinsurance business. He was the former president and founder of Chubb Re Inc. and was most recently the chief executive officer of reinsurance for Alterra Capital Holdings Ltd.

The letter sent on Wednesday to Third Point Investors said that, “We believe that the combination of Third Point’s longstanding exceptional asset management returns, Mr. Berger’s standout underwriting track record, and a reinsurance market that may improve following multiple events in the past 12 months make it a promising time to launch Third Point Re”.

Reinsurance rates tend to increase after natural disasters. According to a report from Guy Carpenter & Co., Earthquakes in Japan and New Zealand as well as flooding in Australia caused over $70 billion insured losses in the first half of the year.

To take advantage of rising rates after natural disasters, banks, private-equity firms and hedge funds have formed reinsurers in the past. After Hurricane Katrina and other storms caused huge losses, the so-called Class of 2005 reinsurers were formed.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.