The chief executive of a hedge fund disputed the assertion in a New York Times article that Allied World Assurance Co. made a substantial investment in his firm.
Mark Patterson, chairman of the investment firm MatlinPatterson, says the Zug, Switzerland-based insurer Allied World made a minor investment into MPAN, a hedge fund investment vehicle.
“The kind reporter at The New York Times took a little bit of liberty and called it a 'substantial minority interest,'” says Patterson.
A story in The New York Times says people briefed on the deal say Allied World has “acquired a substantial minority interest” in the hedge fund. The Times goes on to say that Allied World also agreed to invest $500 million into MatlinPatterson's funds.
Patterson declined to say how much the investment was that Allied World made.
The Times notes that the deal is just another example of insurers and other financial institutions seeking additional ways to deploy capital and make additional revenue in the face of continue disappointing investment returns.
Allied World recently announced that it expects to report $40 million in crop reinsurance losses for the third quarter of this year. It also expects to report another $5 million to $10 million losses and loss expenses from Hurricane Isaac, which struck the Gulf Coast in August.
Allied World was in a bidding war with the insurer Validus for Transatlantic Holdings for months. The two would eventually lose out to Alleghany Corp.
In a statement released late today, Allied World says it is expanding its asset management business with the creation “of a stategic partnership between MatlinPatterson and Allied World Financial Services Co., Inc., a subsidiary of Allied World.”
Allied World says it will become a minority owner in MatlinPatterson and will “provide growth capital for the continued expansion of their asset management platform.” MatlinPatterson will manage $500 million of Allied World's portfolio, the statement continued, “over time, in existing and future strategies.”
“This partnership solidifies a longstanding association between Allied World and MatlinPatterson co-founder Mark Patterson, who previously served on our board of directors,” says Scott Carmilani, chairman and chief executive officer of Allied World.
Updated with comments from Allied World.
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