Third Point LLC, the New York based alternative asset manager, has proposed an all-share combination with Malibu Life Reinsurance SPC, a Cayman Islands-based life and annuity reinsurance platform launched by Third Point in May 2024.
The proposed transaction has been unanimously recommended by the firm’s Strategy Committee following the conclusion of a strategy review, and Third Point’s goal is to create a “fast-growing” and “fully capitalised” London-listed reinsurance entity.
Under the proposal, Third Point Investors Limited would acquire Malibu Life Re from Malibu Holdings LLC, which is wholly owned by Third Point Opportunities Masters Fund L.P., in exchange for the issue of new ordinary shares in Third Point on a NAV for NAV basis.
Third Point has proposed a potential tender offer of at least $75 million to effect rotation of shareholders seeking liquidity.
The company reveals that it has received conditional commitments from new and existing investors, including Third Point, for $55 million in aggregate to purchase a proportion of ordinary shares that may be tendered by participating shareholders at a price that represents a discount to NAV of 12.5%.
Third Point intends to buy any additional tendered ordinary shares, up to the maximum value of any potential tender offer, and the price of any additional tender offer is expected to be by reference to a discount to NAV of 12.5%.
In connection with the offer, Third Point, representing some 25% of issued share capital, has undertaken not to tender its ordinary shares.
The buyer says that significant upfront investment already made by Third Point and its affiliates into Malibu enables it to acquire the reinsurer at an attractive entry point.
“This unique and innovative opportunity facilitates an orderly transition of the Company’s current investment strategy into a fully capitalised, London-listed, reinsurance operating company,” says the buyer.
Malibu Life Re is focused on predictable liabilities within the $1 trillion and growing fixed annuity market in the U.S., and is targeting to scale to around $5 billion in annual premium by the end of 2027 via its “robust, spread-based business model” and scalable and efficient operating platform.
The proposal states that Malibu Life Re’s capital needs for this growth strategy will be met by periodic redemptions from the Third Point Opportunities Masters Fund L.P., resulting in a pure play operating company with roughly 18-36 months following completion of the acquisition.
Malibu Life Re is led by Director, Gary Dombowsky, co-founder and former CEO of Knighthead Annuity & Life Assurance Company, who will join the Board as CEO once the deal completes.
In terms of acquisition structure, Third Point has agreed to acquire the reinsurance platform at its tangible book value in exchange for the issue of the consideration shares to be valued at the buyer’s NAV per share.
Malibu Life Re has a tangible book value of around $68 million, and Third Point is expected to contribute a further estimated $15 million of equity capital to the reinsurer during the second quarter of 2025.
Reportedly, Third Point and its directors Robert Dorey, Huw Evans, and Claire Whittet, have irrevocably undertaken to vote in favour of the acquisition and related proposals, representing in aggregate approximately 25.2% of the company’s total voting rights as at the date this proposal was announced, on the morning of May 21st, 2025.
Additionally, Saba Capital Management Fund L.P. has undertaken to use reasonable endeavours to procure the vote in favour of the acquisition and related proposals in respect of the shares beneficially owned by Saba Capital and over which it can exercise voting rights.
Rupert Dorey, Chairman of Third Point Investors Limited, commented on the proposal: “We are delighted to announce the proposed acquisition of Malibu. This is an innovative and transformational transaction that solves the structural headwinds impacting the investment trust sector to deliver a unique proposition for shareholders.
“Malibu is a high-potential reinsurance platform with a robust pipeline of reinsurance and other origination opportunities that will enable it to achieve scale in the near-term. The business plan for Malibu provides a clear path to steady, consistent returns, and an improved trading multiple for the Company.
“I would like to thank the Strategy Committee for their thorough and diligent approach which has led to an innovative and compelling transaction that the Board is pleased to present to Shareholders.”
Dimitri Goulandris, Chairman of the Strategy Committee, said: “Following a comprehensive strategy review and extensive due diligence, the Strategy Committee is pleased to have been able to find an option that not only sees the Company evolve over time into a pure-play operating company with a very attractive, robust and scalable business model, but also, due to strong support for the transaction from existing and new investors, provides new capital to assist in rotating out existing Shareholders who are unable or do not wish to remain invested.
“I am delighted to be chairing the new business and look forward to working with Gary and his team as Malibu executes its plan to deliver strong growth with attractive unit economics.”
Dombowsky, Director of Malibu, added: “The US fixed annuity market is growing rapidly and there is a structural need in the sector to provide competitively priced and innovative reinsurance solutions. As a well-capitalised business backed by a leading global alternative investment manager, Malibu is strongly positioned to capitalise on that opportunity. This is a pivotal moment in the business’ trajectory and we look forward to scaling Malibu rapidly to establish it as a key player in the space.”
