The Bermuda-based Max Capital Group announced that the return on its alternative investments for the two months ended February 28, 2009 is expected to be approximately 2 percent, or an increase in value of approximately $18 million.
Max said the “Company’s alternative investment performance for the two months compares to 0.36 percent for the HFRI Fund of Funds Composite Index, which the Company believes is the most comparable benchmark for this asset class.”
Chairman and CEO W. Marston (Marty) Becker noted: “Recent results demonstrate that the actions Max took in the latter half of 2008 to rebalance and reduce risk in our alternative asset portfolio are working. Over the course of 2008, we reduced our alternative investment allocation from approximately 21 percent at December 31, 2007 to 14 percent at year-end 2008.
“Our intention is to further reduce the allocation to a 10-12 percent range, as well as to rebalance strategies within this asset class. This transition is well underway and, following the anticipated merger of IPC and Max, we expect the combined company to target this same 10-12 percent level of alternative assets, and to further diversify its allocation within alternative investments.
“It is expected that no more than 5 to 7 percent of invested assets will be in hedge funds with the balance of the 10-12 percent of invested assets in other attractive alternative asset classes. These steps are intended to lower the volatility of investment returns to a level considered appropriate for a growing global specialty insurance and reinsurance company such as Max.”
Source: Max Capital – www.maxcapgroup.com
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