Raising capital to launch a special investment vehicle

[solarv]

Hi there,

I'm planning to launch a special investment vehicle mainly investing in insurance/reinsurance companies. Sounds familiar? Yes, this is going to be very similar to what Berkshire Hathaway is doing. I see lots of hidden values in those companies. To put it in a simple way, imagine all these companies locking in the policy holders' cash-flow (from premiums), and payout the claims some times in the future, and most of the times, those claims never happened. Even if they happen, given the law of large numbers, the probability on the winning side is still extremely high, losses will be smoothened once we have a big pool of policy holders. Remember they hire the smartest people on earth to run those numbers, the Actuaries. It's much better than running banks, your loan default rate is dependent on the market condition, the default rate is not fixed. But for insurance loss ratio, in long run, the mortality/loss probability should be pretty much the same unless there is a WW3 or nuclear war...

Monitoring insurance/reinsurance companies worldwide is part of my job as an Analyst. Area of focus will be mainly those companies listed on any of the exchange in the developed and emerging markets we could gain access to.

I do look at other type of companies as well... usually go for recession proof and high earning visibility companies.

If you like the idea, we could discuss more. Please PM me as I usually don't visit this site very often. Don't contact me if u are a market speculator. Thanks.

[ksl]

I so the last website you had, I think your idea is pretty good, although, it's not easy to convince clients, especially when one cannot even trust Lawyers!

[solarv]

i know what u mean. When there is money involved, u can hardly trust anyone. That's the barrier to this idea. The first step to structure this vehicle is to find a way how we could protect every shareholder's interest.

[ksl]

You may want to look at a Power of Attorney
http://en.wikipedia.org/wiki/Power_of_attorney

You don't need to even touch their money! Just invest for them, using the power of attorney, although they deposit the money into an account for investing at the bank...of which you are not allowed to withdraw. I'm sure the bank could sort something out, to minimise risk for your clients, it can be arranged, that you cannot withdraw, only your fees or %, of which the bank can oversee, and distribute profits. I'd have a chat with them, using a power of attorney to invest..although the wording must be sorted legally, to protect yourself too, and have limited liability insurance cover you!
I don't know the legality on finance, so i can't help you, but I have been told one cannot advise to invest without a licence. But the Power of Attorney may be the loop hole.

Although I am refering to UK law, not Singapore, although you could check it out...I have used this method myself in the early 80's when doing car imports from Europe, to circumvent the customs & excise laws, it worked well, even though my lawyer had doubts, that it could be done. I wasn't the first doing it, so I know it could be done! Large amounts of money had to be paid out in deposits for the cars to be made to UK standards, for personal imports. It's a useful document to have, if it's accepted in Singapore.

[solarv]

ok man. I will look into this. Update me if you have any latest information. Thanks a ton.

[ksl]

ok man. I will look into this. Update me if you have any latest information. Thanks a ton.

Keep me informed if anything turns out positive! You can PM me! Thanks

[luxiana]

where do you want to register your SPV?

if it's in Singapore depending on your pool of investors the regulation is not the same...

what are the volatily levels for these insurane/reinsurance companies now??

by the way: the logic behind the "insurance are sitting on a pile of cash" is flawed. indeed: insurance companies are like bank: they invest in financial markets and their profits are subject to market conditions...