Third Point Reinsurance made a net loss of $14.7m for the fourth quarter of 2014, compared with net income of $80.1m for the fourth quarter of 2013, a fall of 118%.
The results helped to drag down the Bermuda-based reinsurer's full year results, with 2014 net income of $50.4m, down 77.8% on the $227.3m it reported in 2013.
"The overall results for the quarter were disappointing due to challenging investment market conditions," said chairman and CEO John Berger. "While slightly higher than the returns of the broader hedge fund indices, the return on our investment portfolio managed by Third Point LLC was slightly negative for the quarter."
With a negative 0.4% fourth quarter return on investments managed by company investment manager Third Point LLC versus a positive 6.0% a year earlier, the fourth quarter net investment figure was a loss of $6.5m compared to an $89.3m profit for the same period of 2013. Reasons cited were losses in the portfolio's corporate and government credit strategies and one merger arbitrage position. These losses were partially offset by gains in several core equity positions in the healthcare and consumer sectors.
For the full year, Third Point Re recorded net investment income of $85.6m, just under a third of the $258.1m it reported in 2013. The return was 5.1% versus 23.9%, largely attributable to Third Point LLC's equity and structured credit strategies.