Swan Re to pursue asset management-led strategy
Bermuda welcomes a new class 3A reinsurer, Swan Re, with assets managed by Swan Wealth Advisors as the reinsurer pursues an asset management-led business strategy.
Swan Re will be supported by a structured asset management strategy—Swan Group’s defined risk strategy—that is designed not to lose capital during market downturns, according to Swan Re, and is one that “focuses on capturing the upside of the market while hedging the downside”.
The strategy has achieved an annual rate of return of 9.3 percent over a 16 year history and the reinsurer will be hoping to leverage these capabilities.
Swan Re’s reinsurance business will meanwhile be sourced from MultiStrat Re, a Bermuda special purpose insurer, through a quota share arrangement.
Commenting on the strategy being pursued by Swan Re, Joe Taussig of Taussig Capital, who advised on the formation of both Greenlight Capital Re and Third Point Re, says: “While past performance is no guarantee, SGHL will be following the path laid out by Berkshire Hathaway and, more recently, improved by GLRE and TPRE, which have delivered superior returns and outperformed Berkshire Hathaway as well as their benchmark funds".
“Greenlight Re has been in business for nearly 10 years. During that time, Einhorn and Swan’s investment performance have been more or less the same, although Swan’s has been less volatile. As such, Swan Re can afford to leverage its balance sheet more than Greenlight has and it would not be unreasonable to expect Swan first 10 years to outperform Greenlight Re’s first 10 years if Swan can hold form on his past performance.”
Randy Swan, chairman of Swan Group Holdings adds: “We are pleased to offer investors an opportunity to seek high returns by combining our low risk DRS investment strategy with MultiStrat Re's stable, low volatility reinsurance business."
Swan will be joined on the Board by two executive members who are veterans in the Bermuda reinsurance community: Gregory Morrison, who has been named as CEO and Jonathan Dodd as CFO.