Protean launches hedge fund insurance

by Gill Montia

Story link: Protean launches hedge fund insurance

A new company, Protean Investment Risks (PIR), is launching its first insurance product, which is aimed at those investing in hedge funds.

The product, which Protean claims is the first of its kind in the world, will protect investors from losses that are a direct consequence of fraudulent actions by a fund manager or any other hedge fund employee.

The insurance will be arranged through brokers and is underwritten by Catlin and Great Lakes Reinsurance, which is part of the Munich Re group.

Cover is available for hedge funds worldwide and clients could include fund of funds, family offices, pension funds, educational establishments and high net worth individuals.

Protean Investment Risks was formed in 2007 by former Dual Corporate Risks director, Nathan Sewell.

Its first insurance product has taken 18-months to develop and has involved in depth consultation with hedge fund investors.

According to Mr Sewell: “Discussions with a variety of hedge fund investors led to the genesis of this product and we have encountered a strong appetite for a policy of this kind – particularly as currently nothing like it is available in the industry.”

In the past decade, frauds involving hedge funds are estimated to have cost investors over $9 billion but Mr Sewell points out that: “The perception of fraud is greater than the history of losses.”

The majority have occurred in the US and Protean’s premiums for American-run hedge funds will be reflecting this.