Labor unions have lobbed another brickbat at billionaire Dan Loeb and his $13 billion hedge fund, Third Point.
The AFL-CIO, the nation’s largest federation of labor organizations, is lobbying regulators to require that Third Point Re, Loeb’s Bermuda-based reinsurance unit, undergo more scrutiny.
AFL-CIO induces Loeb labor pains by New York Post
The federation fired off a letter yesterday to the Securities and Exchange Commission, arguing that Third Point Re should be considered an investment company rather than a reinsurer — with all the disclosure and regulatory requirements that entails.
Third Point Re hopes to raise $370.6 million in an IPO set to price tomorrow.
“We think this is like a mutual fund and should be regulated the way a mutual fund is,” Heather Slavkin, senior legal and policy adviser at the AFL-CIO, told The Post. “The conflicts of interest between Third Point’s hedge fund and the reinsurance company would be difficult to sustain in a registered investment company.”
If the SEC agrees, the reinsurance unit might not be able to invest in Third Point’s hedge fund assets. Recently, hedge funds have launched reinsurance units as a way to get more permanent capital to invest in their funds.
Third Point did not reply to a request for comment.
The AFL-CIO letter is the latest union salvo against Loeb, whose ties to conservative groups that support the abolishment of public-sector pensions earned the wrath of the American Federation of Teachers recently. The AFT has put Loeb on a list of hedge fund managers it recommends its members avoid when investing their pension money.
In the letter to the SEC, Brandon Rees, acting director of the AFL-CIO’s Office of Investment, said that 73 percent of Third Point Re’s assets are invested in securities managed by the sister hedge fund and all of its profits this year have come from the hedge fund side.
As a result, he argued, the company should not enjoy an exclusion that insurance companies can get if they are “ ‘engaged primarily and predominantly’ in writing insurance or reinsuring insurance companies’ risks.”
mcelarier@nypost.com