Dan Loeb has won a vote to turn his UK investment trust into a life and annuity reinsurance company, defying a fierce backlash from some shareholders.
A majority of investors backed a plan for London-listed Third Point Investors to acquire Cayman Islands-based Malibu Life Reinsurance, according to a statement Thursday. The British trust’s previous purpose was to invest in Loeb’s hedge fund Third Point LLC.
The planned deal will bring a “high-quality reinsurance platform to the London market,” Third Point Investors Chairman Rupert Dorey said in the statement.
Read more: Third Point UK Investors Should Reject Reinsurance Deal, ISS Says
The New York-based fund, which manages about $21 billion in assets, set up Malibu Life last year. The move mimicked a raft of alternative asset managers such as Apollo Global Management Inc. who have all created captive insurance customers for their investments over the past 15 years or so. In 2023, Loeb explored buying Bermuda-based SiriusPoint Ltd., of which he is a founding shareholder.
The billionaire hedge fund manager’s victory follows a spat with a group of shareholders, including London-based Asset Value Investors, who argued the vehicle should offer investors a full exit given the proposed change of strategy. Proxy advisers ISS and PIRC have recommended shareholders reject the plan, while Glass Lewis backed all resolutions except the incentive proposal, citing the “potential for excessive payouts.”
Third Point holds a 25% stake in the UK vehicle. It was allowed to vote its stake after British regulators tweaked rules on related-party transactions, as part of a wider overhaul to attract more initial public offerings.
Activist investor Boaz Weinstein has been among the backers of Third Point Investors’ plan, which was the result of a strategy review after a period of poor performance.
Thursday’s vote marks the latest shake-up in Britain’s 拢267 billion ($362 billion) investment trust sector, which has seen a rapid decline over the past few years, driven by high interest rates, insufficient size and liquidity.
While trusts still make up roughly a third of the FTSE 250 index, a flurry of mergers and acquisitions that started in 2023 have contributed to the sector shrinking to 278 listed trusts 鈥� down by 49 鈥� according to the Association of Investment Companies.
Photograph: Daniel Loeg, founder and chief executive of hedge fund Third Point; photo credit: Eva Marie Uzcategui/Bloomberg
Topics Reinsurance London
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