Cohen's SAC in talks to sell reinsurance business: sources

Thu Oct 3, 2013 7:52pm EDT
 
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By Jessica Toonkel, Katya Wachtel and Svea Herbst-Bayliss

NEW YORK (Reuters) - Steve A. Cohen's SAC Capital Advisors is in discussions to sell its reinsurance business as the $14 billion hedge fund deals with the fallout of a long-running insider trading probe, four people familiar with the discussions said on Thursday.

Multiple parties have expressed interest in the reinsurance company, according to one person familiar with the company. However, the company's board is considering various options, which could include, but is not limited to, a wind-down of the business, that person said.

The four sources familiar with SAC Re's potential sale wanted to remain anonymous because they are either not permitted to speak to the media or because the talks are private.

Selling the Bermuda-based reinsurer, launched only last year, would help Cohen continue on the path of converting his hedge fund into a family office after the government filed criminal insider trading charges against the SAC in July.

The insurance arm, with roughly $500 million in assets, is a source of outside capital that needs to be returned or dealt with in some way to make such a transition possible, people familiar with the matter said. Virtually all outside investors have pulled their capital from Cohen's fund since the charges.

SAC has denied the charges. A spokesman for SAC had no comment on the reinsurance matter on Thursday.

About 25 percent of the reinsurer's assets are funded by Cohen, according to one of the sources. SAC Re's assets also include founding capital from Capital Z Partners, a private equity firm.

Speculation that SAC would have to sever ties to the reinsurance unit has been mounting since late July, especially after insurance rating group A.M. Best placed SAC Re on review with negative implications after the charges were filed.   Continued...

 
An exterior view of the headquarters of SAC Capital Advisors, L.P. in Stamford, Connecticut July 25, 2013. REUTERS/Michelle McLoughlin