White Mountains' Chairman Jack Byrne offered reassuring words toshareholders yesterday concerning the wipeout of original investorsin a reinsurance sidecar as a “sorry chapter” in the history ofsuch vehicles.
During a conference call, Mr. Byrne responded to concerns ofanalysts and investors in Bermuda-based White Mountains InsuranceGroup that bubbled up after a series of announcements last weekregarding reinsurance subsidiary Folksamerica Reinsurance Companyand its sidecar, Olympus Reinsurance.
A sidecar is essentially a special-purpose vehicle in whichthird-party investors, such as hedge funds or private equity funds,collaborate with an underwriter to provide additional capacity toexisting reinsurers for short-tail lines of business.
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