How Reinsurers Help Hedge Funds Shelter Taxes
- Thread starter Banjo
- Start date
They aren’t bona fide businesses so i think banjos characterization is fair.
really? you analized all of them? you had access to their private books to know whats in it? the one I took a look at (Einhorn reinsurer) looked pretty legit to me. Its one of the few with public financials. I think Loeb also has, I doubt his would be any different. They are both following their heros footsteps (buffett) so they got every incentive to be for real
No. And I'm sure you didn't analyze all of them as well. But the general scheme is to put your money in a re-insurance company and buy the minimum reinsurance required (something like 30%) to keep the company "legitimate" and then invest the other 70% in your own hedgefund tax free. The companies weren't designed to provide reinsurance. they were designed to avoid taxes. That's the definition of a tax shelter.
You seem to know a lot about companies you never looked at
Since you looked at Einhorn's reinsurere, how many people work there? What is their reinsurance liabilities? How much of the assets are invested in Greenlight vs some stable portfolio of bonds?
Buffet's reinsurer (General RE) is head quartered in Connecticut and actually sells reinsurance. General RE is run by Ajit Jain and employs hudreds of statisticians to quantify the risks when they sell the reinsurance. While all these value investors decided to start reinsurance businesses in order to sell reinsurance (a market they know nothing about)?
Well, you've now written several posts about reinsurance, which you know nothing about!
Not enough to start a reinsurer. But I am working on building a domestic captive!