Shares of Third Point Reinsurance open flat in debut
(Reuters) - Shares of Third Point Reinsurance Ltd (TPRE.N) hovered around their offer price on the first day of trading, valuing the property and casualty reinsurer at about $1.27 billion.
About 3.4 million shares changed hands by 0953 ET, making the stock the most traded on the New York Stock Exchange.
Third Point Reinsurance, controlled by billionaire hedge fund manager Dan Loeb, raised $275.6 million after its initial public offering of 22.05 million shares was priced at $12.50 each.
Third Point LLC, the $11.6 billion hedge fund run by Loeb, launched its reinsurer arm last year with $750 million in capital. The reinsurer is led by John Berger, former CEO of Alterra Capital Holding's reinsurance business.
A growing number of hedge fund managers are turning to the reinsurance sector, attracted by its higher returns and ease of raising funds.
Hedge fund manager David Einhorn launched Greenlight Capital Re Ltd (GLRE.O) in 2004 and took it public in 2007. The stock is trading well above its IPO price.
John Paulson's Paulson & Co funds established a reinsurance unit PaCRE Ltd in Bermuda and Steve Cohen's SAC Capital Advisors launched a reinsurance arm SAC Re last year.
Bermuda-based Third Point Reinsurance reported revenue of $94.4 million and net income of $26.2 million for the quarter ended June 30. The company competes with Tokio Millennium Re Ltd, Endurance Specialty Reinsurance Ltd and AXIS Specialty Ltd.
Loeb's stake in Third Point Reinsurance is reduced to 8.45 percent from 10.75 percent after the offering.
The company plans to use the proceeds to increase its underwriting capacity and for general corporate and investment purposes.
J.P. Morgan Securities, Credit Suisse, Morgan Stanley, Citigroup, Merrill Lynch, Pierce, Fenner & Smith were the lead underwriters for the offering.
(Reporting by Neha Dimri in Bangalore)
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