* CEO tells Bermuda paper looking to raise $250 mln
* Major investor to be announced soon
* New fund will write more traditional coverage
Sept 13 (Reuters) - The reinsurer backed by hedge fund Third Point and launched earlier this year is already out raising fresh capital, Bermudan newspaper The Royal Gazette reported on Thursday, with the aim of underwriting more traditional kinds of catastrophe coverage than its structure currently allows.
TP Re Chief Executive John Berger told the paper he is trying to raise $250 million by year's end, with more to come thereafter. That would be on top of the $785 million in capital the Bermuda-based reinsurer launched with earlier this year.
Dan Loeb, the prominent fund manager who runs Third Point, personally put up $75 million. Under an arrangement between the two entities, Third Point manages TP Re's investment accounts, but does not directly invest in the company.
Because Third Point has an aggressive strategy for the capital, Berger told the paper on the sidelines of an industry conference in Monte Carlo, TP Re has been fairly conservative in the risks it is insuring.
The money being raised now will go into a new fund that will be managed more conservatively, so the reinsurer can be more aggressive in underwriting traditional catastrophe - or "cat" - coverage.
"Because of the aggressive investing, we really can't put super-volatile business on the Third Point balance sheet, so we have a minimal amount of property cat business," Berger told the paper. "But one of the main purposes of reinsurance is to provide cat capacity. So we're going to start a separate cat fund to be able to write that business."
Prominent hedge fund managers like David Einhorn, Kenneth Griffin, George Soros, John Paulson and Steven A. Cohen have all been involved in reinsurance over the last few years, with varying degrees of success.
The move has become a popular way to provide another source of investment capital: the reinsurers take in premiums and the hedge funds manage their investment accounts, collecting fees along the way.
Because the performance of the reinsurance industry is not correlated to other factors that influence the broader financial markets, many investors like pension funds have been drawn to the business of late.
Berger said TP Re has secured a major cornerstone investor for the new fund, who will be revealed soon.