Insurance firm Validus has launched a $160 million joint venture called AlphaCat 2014.

The special purpose vehicle will be used to write collateralised reinsurance and retrocessional contracts for the new renewal season.

The pot is made up of $138 million from outside investors (86.25 percent) with the remaining $22 million put up by Validus.

Ed Noonan, chairman and chief executive officer of Validus, said: “AlphaCat 2014 reflects the continued importance of Validus’ franchise in the global property catastrophe reinsurance market.

“We are pleased with the significant level of investor support which reflects on the scale of Validus’ operations, the skill of our underwriting team and the AlphaCat infrastructure we have developed to manage third-party capital.”

AlphaCat Managers, part of Validus, will underwrite business for the new limited company and will be paid commission for drumming up business and a profit commission based on the underwriting results.