New Cartesian Business Finds Visibility in the Eye of the Storm
In a world of uncertainty, Cartesian Capital Group is betting on one thing it knows hasn't changed: natural disasters. This week the firm launched operations for its new catastrophe reinsurance business, called Iris Reinsurance. The business will be led by Chase Toogood, formerly with Credit Suisse and ACE Capital Re, and Schuyler Havens, formerly of Freestone Capital Management. Cartesian Capital, which typically makes investments of between $40 million and $125 million, contributed to Iris Re with capital from its first fund, alongside contributions from outside investors. Cartesian Capital's private equity operations continue to invest from its first fund, Pangaea One LP, a $1.05 billion pool closed in 2007 that is 55% deployed. Cartesian may be the first buyout firm to fulfill a year-end prediction from Reuters that private equity firms would flock to the reinsurance business for private equity-like returns of around 20%. I spoke with Cartesian Capital's Managing Partner and co-founder, Peter Yu (who also founded AIG's private equity business) about why he expects to outperform that estimate, what private equity has in common with reinsurance, and the industry's true market dislocation.
