Third Point RE Valued At $1.27B After IPO

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Third Point Reinsurance Ltd. (NYSE:TPRE) raised about $275.6 million in its IPO Wednesday. The reinsurance unit of Dan Loeb’s hedge fund debuted at the New York Stock Exchange under the ticker symbol “TPRE.” The IPO of Third Point Reinsurance Ltd. (NYSE:TPRE) was priced at the low end of the previously proposed range of $12.50 to $14.50 by selling 22.1 million shares.

The company and its existing shareholders had earlier planned to sell 22.2 million shares, but reduced it slightly. On its first day of trading, shares of Third Point Reinsurance Ltd. (NYSE:TPRE) continued to trade near the offer price, giving it a market value of about $1.27 billion.

Third Point Re adopts a typical approach

Dan Loeb’s $11.6 billion hedge fund launched the reinsurance business in 2012 with $750 million capital.  John Berger, who earlier headed the reinsurance arm of Alterra Capital Holding, is the chief of Third Point Reinsurance Ltd. (NYSE:TPRE), according to Lee Spears & Noah Buhayar of Bloomberg. The company said in a regulatory filing Wednesday that it will use the proceeds to boost its underwriting and investment capacity and for general corporate purposes.

The Bermuda-based reinsurer depends on the hedge fund Third Point LLC to manage a portfolio of about $900 million. Bloomberg said that Dan Loeb’s unique investing style has differentiated Third Point Reinsurance Ltd. (NYSE:TPRE) by not following the usual approach of fixed-income investments. For example, Third Point Re has placed 50% of its money in stocks and 40% in bonds. In contrast, most of its competitors including Axis Capital Holdings Ltd. (NYSE:AXS) and Endurance Specialty Holdings Ltd. (NYSE:ENH) invest heavily in fixed-income securities.

Third Point Re stock is soaring

For the quarter ending June 30, Third Point Reinsurance Ltd. (NYSE:TPRE) reported $26.2 million in net income and $94.4 million in revenues. After the IPO, Dan Loeb’s stake fell from 10.75% to 8.45%. Shares of Third Point Reinsurance Ltd. (NYSE:TPRE) have risen 13.24% since its IPO. The stock was up 7.20% today to $14 per share, valuing the company at $1.41 billion.

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