Third Point to list Malibu Re on London Stock Exchange
New York-based hedge fund Third Point Investors, led by activist investor Daniel Loeb (pictured), plans to list its Cayman-domiciled annuity reinsurer Malibu Re on the London Stock Exchange.
Third Point Investors Limited (TPIL), the group’s LSE-listed closed-ended investment company, which ploughs moneys into the Third Point master fund, will regear and be merged with Malibu Re, according to the results of a strategic review within the group just announced.
Malibu was established by Third Point in February 2024 and by Q2 had already tied down an inaugural c.$3 billion flow reinsurance treaty with a blue-chip US life and annuities platform, and began receiving its first premiums.
Malibu is currently targeting to scale to neighbourhood $5 billion in annual premiums by the end of 2027 through execution of “a robust, spread-based business model with a highly scalable and efficient operating platform,” management said. Expect a mid-teens ROE at that point.
Malibu still has a clear start-up feel. The operating model is “currently largely outsourced,” management said. Select in-house capabilities will be developed in a pending stage, heading towards a long-term operation combining in-house functional leadership with outsourced day-to-day operations “to maintain operating scalability and flexibility,” management said in its presentation of the deal.
The no-cash deal is being done for equity and Malibu’s capital needs for growth will be met through periodic sales of its to-date holdings in the Third Point Master Fund running for some 18 to 36 months, management said. Third Point is expected to contribute a further estimated $15 million of equity capital to Malibu during Q2 2025.
And the growth opportunities are being touted. The group with 12M trailing premium of $700 million had a $800 million annualised run rate by Q1 and a pipeline hinting at $5 billion, management said. Add to that some 25 potential opportunities identified for M&A in the US.
The M&A focus will be the US direct market, investor materials suggest. The plan: acquire a scale US direct writer or acquire a shell and start building in order to start origination in year two and hit a $2 billion p.a. premium target in year three.
The group is mulling a $75 million buy-out offer for shareholders who might like to switch trains at the coming station.
The full deal may be done by August 2025, a timeline suggested.
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