NEW YORK, Nov 7 (Reuters) – Citadel Investment Group, a leading hedge fund manager, is again pushing into the reinsurance market by launching a new Bermuda-based venture backed by $500 million in fund assets.
The new reinsurance company, called New Castle Reinsurance Co. Ltd., follows on from Citadel’s existing Bermuda-based reinsurer called CIG Re. The move, announced late last week, is part of a growing trend among hedge funds to invest in reinsurance as returns from traditional stock and bond trading strategies decline.
Reinsurance is essentially insurance for insurance companies against catastrophic loss.
Chicago-based Citadel, which has some $12 billion under management, formed CIG Re in September, 2004 with $450 million in capital. But while CIG Re suffered what has been termed substantial losses from hurricanes Rita and Katrina this year, it did not stop Citadel from establishing the new company.
