Pine River Capital Management LP, the $14.3 billion hedge-fund firm founded by Brian Taylor, is raising capital for a reinsurance company in the latest push by a money manager into the industry.
The firm is seeking to raise $500 million to $750 million for the reinsurer, which will be named Pine River Re and based in Bermuda, said a person familiar with the matter who asked for anonymity because the matter is private. The business will be led by Bill Jewett, a former president of insurer Endurance Specialty Holdings Ltd., the person said.
Money managers including Dan Loeb have started reinsurers in recent years to raise funds that are less subject to client withdrawals. The companies, which help insurers shoulder risk, earn premiums that they often invest with their founders’ hedge- fund firms.
Such arrangements “eliminate the need to fundraise from limited partners, which, as hedge fund principals know all too well, is a high-touch, often expensive endeavor that is becoming increasingly challenging,” JPMorgan Chase & Co. said in a report last year. “Permanent capital structures also eliminate the potential for limited partner redemptions.”
Steven Vames, a spokesman for Pine River, declined to comment.
Last year, Loeb took his Third Point Reinsurance Ltd. public in an offering that raised more than $300 million. Hedge- fund manager David Einhorn’s reinsurer Greenlight Capital Re Ltd. has been publicly traded since 2007.
Quantitative hedge fund firm Two Sigma Investments LLC partnered with a group that bought a reinsurer from Steven A. Cohen, the billionaire founder of SAC Capital Advisors LP. Cohen sold the reinsurer in December after his hedge fund reached a $1.8 billion deal to end a criminal investigation into insider trading.
Pine River focused on mortgage investing after the 2008 financial crisis and, in 2012, managed one of the most profitable U.S. hedge funds. The firm has increased stock investments and hired James Lee from Barclays Plc to help buy assets from banks, a person familiar with the matter said last month.
Taylor spent 14 years at hedge fund EBF & Associates before founding Pine River in 2002. He named the company after a Minnesota town close to where he has a lake house.
–Editors: Dan Kraut, Dan Reichl