Max loses $85M on hedge fund investments

The Royal Gazette: "Bermuda-based insurer Max Capital Group Ltd. said yesterday that losses on alternative investments, such as hedge funds, cost the company about $85 million in the fourth quarter.

The company, which said it had reduced its hedge-fund exposure to 16 percent of its portfolio by the end of 2008, said it would scale back further to a maximum of 14 percent by the end of the first quarter.

At September 30, 2008, the proportion in alternative investments was 18.6 percent.

Max Capital is reallocating its portfolio 'with a view to mitigating future volatility', chief executive officer Marston Becker said in the statement.

The total return on investments, including government securities, was one percent in the fourth quarter, and negative 1.7 percent for the year, the firm said."