Bermuda-based Third Point Re and Hiscox announced they have entered into an initial agreement in principle to partner in the development of Third Point Reinsurance Investment Management Ltd’s catastrophe reinsurance fund management business.Hiscox will be a shareholder of Third Point Reinsurance Investment Management Ltd, which was recently established by Third Point Re, and intends to make a significant investment in the Third Point Reinsurance Opportunities Fund Ltd, the initial fund entity launched.Structured via a quota share agreement, tailored portfolios of catastrophe reinsurance exposure will be ceded by Hiscox to the Fund.“We are thrilled to be teaming up with Hiscox on this project,” said John Berger, CEO of Third Point Re. “Hiscox is one of the best re/insurance groups in the world and we look forward to developing a catastrophe reinsurance fund business with them.”At the Rendez-Vous in Monte Carlo, the reinsurance industry’s annual get-together, Mr Berger told The Royal Gazette that he had hopes of raising $250 million and beyond to capitalise the new fund.“We’re hoping to have $250 million by year-end and we’re in the process of raising money now. In the world of property cat, that’s very small and we know that. A real, sustainable size for that sort of business is $500 million to $600 million — and even then you’re fairly small. If we can get to that and establish a track record, then over time maybe we can make it bigger,” he said.Jeremy Pinchin, Hiscox Bermuda’s CEO said of the agreement: “Finding innovative ways to bring fresh sources of capital to the market is a key objective of ours, it gives our clients and broker partners more opportunities to work with us. We look forward to developing a successful partnership with Third Point Reinsurance Ltd.”Third Point Re, backed by Daniel Loeb’s Third Point hedge fund, was founded earlier this year with around $750 million in capital. The company takes moderate risk in its underwriting portfolio, writing lines including multi-peril crop reinsurance, non-standard auto, standard auto and workers’ compensation.