Former Max Capital chief executive officer Bob Cooney is working on a reinsurance start-up, The Insurance Insider is reporting.

A story in the London-based insurance publication last week has stated that their sources have said Mr Cooney, a long-time resident of Bermuda, is likely to head up the venture, with Adam Mullan, a former Alterra executive, in a senior role.

The Insurance Insider added that the new venture will need to secure an A- rating from AM Best, and so will need to raise between $500 million and $1 billion.

The story links the development with “Bermuda’s hedge fund rush” and said that it is thought that Mr Cooney is working with an unnamed hedge fund and is also thought to be talking to a major family trust.

The reinsurer could go live as early as the middle of the year, it is understood.

The publication quoted ‘sources’ who said that Mr Cooney and Mr Mullan are looking to create an underwriting business, rather than an elaborate vehicle to secure greater tax efficiency. “It’s going to be more along the lines of a Hamilton underwriting business rather than just Tax Avoidance Re,” one source said, according The Insurance Insider.

It added: “Cooney has a history of working with alternative capital. When the former XL Insurance CEO founded Max Capital with Moore Capital, it was as a vehicle committed to working the asset side of the balance sheet.

“From November last year until March, Mullan worked as a consultant for the Enstar vehicle that acquired speciality insurer Torus. Following the long-awaited closure of the deal on 1 April, Mullan was expected to take up a major executive role with Torus. “Instead, he declined the opportunity in order to reunite with Cooney.”

The Insurance Insider went on to say that the interest of hedge funds in reinsurance “is at an all-time high.

A string of vehicles involving hedge funds or alternative asset managers have been set up in recent years including SAC Re, Third Point Re, Pine River Re and Watford Re.

“Late last month, Watford Re announced that it had closed fundraising with $1.13bn ... The asset managers are attracted by the ‘permanent capital’ that underwriting offers them and the tax efficiencies that can be gained by holding investments offshore in Bermuda.”

It continued: “A whole swathe of the biggest hedge funds are believed to be exploring establishing stand-alone reinsurance vehicles or a joint venture with a traditional reinsurer along the lines of the Arch-Highbridge enterprise Watford Re.”

And The Insurance Insider is also linking billionaire investor and chairman of Soros Fund Management George Soros to interest in a Bermuda start-up.

It said: “Two sources suggest that George Soros had sent a fact-finding party to Bermuda to investigate the possibility of a start-up and there has also been talk that Searchlight Capital — which was founded by Apollo and KKR alumni — may have revived its interest in the space.