Chief Executive Officer, Mutli-Strat Holdings
Joe Taussig is the CEO of Mutli-Strat Holdings Ltd., which seeds new reinsurers in partnership with a number of asset managers, who manage all of the investable assets of their particular reinsurer. These reinsurers are a virtual certainty to outperform each asset manager’s funds. They also generate permanent capital for the asset managers and significantly increase AuM from sources otherwise unavailable without a reinsurer.
This is a model pioneered by Warren Buffett and recently replicated by David Einhorn, Dan Loeb, and Steve Cohen. To launch their reinsurers, the latter three had to divert significant internal resources for 18 months to 2 years, spend more than $1 million, make personal capital commitments in excess of $50 million, raise in excess of $200 million of startup capital, offer significant compensation guarantees to reinsurance executives ($25 million in the case of Max Re), and take significant busted deal risks.
Mutli-Strat has made the front end investment so that Multi-Strat and a given asset manager can launch a reinsurer in 90 to 120 days for $100,000 in startup costs, outsource all reinsurance functions and be ahead of a fund investment with an identical investment strategy by the same manage with as little as a $1 million commitment by the end of the first year, without any compensation guarantees to reinsurance executives, and with very little busted deal risk.
Prior to forming Multi-Strat, Mr. Taussig has acted as a merchant banker for numerous financial services startups, divestitures, and acquisitions since 1990. Most of the capital for some of these companies has been provided by the hedge fund industry or hedge fund investors and many of the startups have invested their assets in asset strategies, managed by hedge fund managers. The best known of these companies is Greenlight Capital Re, which has more than $2 billion of assets managed by David Einhorn and is publicly traded on NASDAQ (symbol – GLRE).
Prior to 1990, Mr. Taussig took significant stock, option, and warrant positions in troubled companies and served as their CEO or COO in an effort to turn them around. Better-known companies included United Press International, Data Broadcasting (now known as Interactive Data and recently sold for more than $3 billion), Cabletek (acquired by First Data Resources, then a subsidiary of American Express), and Instinet, which was bought by Reuters in 1987.
Following graduation from the U.S. Naval Academy in 1966, Mr. Taussig was commissioned in the U.S. Marine Corps and attained the rank of Captain. He served in Viet Nam as a patrol leader with the First Force Reconnaissance Company and was the Commanding Officer of Bravo Company, 1st Battalion, Fifth Marines in Hue City during the Tet Offensive. He later earned an MBA from Harvard University in 1972 and taught Corporate Finance in the MBA program at the University of Southern California from 1973-1977.
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