PDH - Premier Diversified Holdings Inc.

[CassiusKing1]

Has anyone bought shares of PRDGF through a US broker like Ameritrade, Fidelity, etc. Ive been trying to buy shares but no luck.

 

Schwab online works.

[redhots]

New hire at Sequent Re

http://www.royalgazette.com/article/20150910/BUSINESS04/150919993

 

Bermuda-based reinsurance company Sequant Re has appointed a new chief underwriting officer.

 

Victor Baillargeon, who has 35 years of experience in the industry, will lead the development of the company’s underwriting strategies to allow a range of investors access to the insurance-linked securities (ILS) market.

 

Sequant Re founder and CEO Guy Cloutier said: “As the ILS market continues to evolve, it is time for reinsurers to be innovative.

 

“It is Sequant’s vision to address the enormous gap between the true cost of risk — natural and man-made — and the protection actually provided through the traditional insurance and reinsurance market.

 

“With Vic on board, Sequant Re is well positioned to enhance its ILS offering and add value to our clients.”

 

Mr Baillargeon added: “I am delighted to be part of a company that has an innovative and fresh perspective on the future development of the convergence of reinsurance and insurance and the capital markets.

 

“We see current challenges in the reinsurance space as a tremendous opportunity.

 

“Investors and cedants are looking for solutions and it is our goal to increase the efficiency and flexibility of the securitisation process and facilitate the access to ILS.”

[Redskin212]

Updated website as well:

 

www.sequantre.com

 

 

 

[IntrinsicEdge]

Sequant Re’s CEO and co-founder Guy Cloutier describes the marketplace being at an inflexion point

 

[Parsad]

Sequant Re’s CEO and co-founder Guy Cloutier describes the marketplace being at an inflexion point

 

 

Guy will most likely be at our dinner again next April.  I encourage you all to meet him and ask him all about insurance.  He's one of the most knowledgeable people I know in the industry, and you'll see why we jumped at the chance to build Sequant Re with him!  He would fit in perfectly at Berkshire or Fairfax...glad he picked us!  Cheers!

[Jurgis]

I assume you saw MKL's purchase of CATCo ( http://finance.yahoo.com/news/markel-acquire-assets-catco-investment-060000063.html ). Isn't FRMO through Bermuda stock exchange also playing in this field (not directly though)?

Looks like ILS ( https://en.wikipedia.org/wiki/Insurance-Linked_Securities_%28ILS%29 ) are sexy hot. ;)

 

Is there a risk in this field similar to risk with other structured finance products? Something like if huge cat hits, the buyers go bust and you can't offload ILS that you have on your hands? Is there counterparty risk for ILSes already sold? Sorry if these are naive questions. :)

 

Good luck.

 

 

[karthikpm]

I assume you saw MKL's purchase of CATCo ( http://finance.yahoo.com/news/markel-acquire-assets-catco-investment-060000063.html ). Isn't FRMO through Bermuda stock exchange also playing in this field (not directly though)?

Looks like ILS ( https://en.wikipedia.org/wiki/Insurance-Linked_Securities_%28ILS%29 ) are sexy hot. ;)

 

Is there a risk in this field similar to risk with other structured finance products? Something like if huge cat hits, the buyers go bust and you can't offload ILS that you have on your hands? Is there counterparty risk for ILSes already sold? Sorry if these are naive questions. :)

 

Good luck.

 

 

 

+1 Jurgis.

 

I had read recently that Ajit Jain was not finding great opportunities in the reinsurance market now .That said I have no clue of ILS etc, they seem too complex for me .

[kilroy04]

ILS - conceptually it is simple.  The company matches outsiders capital with a re-insurance market need. It does this for a fee - and can have their own capital participation or not  It is essentially the back office of a reinsurance company but instead of putting it's own capital at risk, it uses outsiders capital for those looking for a risk return relatively uncorrelated to the stock market.  The capital owners can choose the level of risk they would like - return of 5%, 10%, or higher depending on their appetite and availability in the market.  The company provides the underwriting/risk management expertise and matches the reinsurance market with the capital. It can match individual risk appetite with market needs because of Bermuda law that allows for very simple creation of capital tranches.

 

So, if you are a small hedge fund that wants to essentially own a reinsurance company for the purpose of the earnings of a reinsurance company, you don't have to acquire or create an insurance company.  You can simply go to Sequant and say - please put my capital to work. This is the risk profile in which I would like to invest. Sequant does the rest.

[Parsad]

Looks like ILS ( https://en.wikipedia.org/wiki/Insurance-Linked_Securities_%28ILS%29 ) are sexy hot. ;)

 

Is there a risk in this field similar to risk with other structured finance products? Something like if huge cat hits, the buyers go bust and you can't offload ILS that you have on your hands?

 

Is there counterparty risk for ILSes already sold? Sorry if these are naive questions. :)

 

 

Answers to your questions:

 

Yes, ILS market is one of the fastest growing sectors of the insurance market.  Completely uncorrelated to other asset classes.

 

Yes, there is some risk to the investor, but remember that the ILS portfolios Sequant designs have multiple (generally 10-15) reinsurance contracts so that they are not terribly correlated.  Not unlike say buying a basket of stocks, mixed duration and types of bonds, etc...you can have losses in one or two of the contracts, but losses in all is very unlikely.  In terms of unloading the risk, the cells are fully collateralized, and are not held by Sequant...so no counterparty risk at all to Sequant...we are essentially the broker.

 

Yes, there are multiple types of insurance linked securities out there, and you can buy counter-party insurance for those securities...catastrophe bonds are an example of existing ILS's.  But no one is doing what Sequant is doing, where the portfolios are in investment cells, fully collateralized, and eventually will have a tradeable platform in the future, not unlike investors simply buying ETF's on exchanges.

 

Cheers!

[Pelagic]

Looks like ILS ( https://en.wikipedia.org/wiki/Insurance-Linked_Securities_%28ILS%29 ) are sexy hot. ;)

 

Is there a risk in this field similar to risk with other structured finance products? Something like if huge cat hits, the buyers go bust and you can't offload ILS that you have on your hands?

 

Is there counterparty risk for ILSes already sold? Sorry if these are naive questions. :)

 

 

Answers to your questions:

 

Yes, ILS market is one of the fastest growing sectors of the insurance market.  Completely uncorrelated to other asset classes.

 

Yes, there is some risk to the investor, but remember that the ILS portfolios Sequant designs have multiple (generally 10-15) reinsurance contracts so that they are not terribly correlated.  Not unlike say buying a basket of stocks, mixed duration and types of bonds, etc...you can have losses in one or two of the contracts, but losses in all is very unlikely.  In terms of unloading the risk, the cells are fully collateralized, and are not held by Sequant...so no counterparty risk at all to Sequant...we are essentially the broker.

 

Yes, there are multiple types of insurance linked securities out there, and you can buy counter-party insurance for those securities...catastrophe bonds are an example of existing ILS's.  But no one is doing what Sequant is doing, where the portfolios are in investment cells, fully collateralized, and eventually will have a tradeable platform in the future, not unlike investors simply buying ETF's on exchanges.

 

Cheers!

 

Forgive me if this question is a little basic but for an investor buying ILS's, do they have a choice in which risks to participate (i.e. construct a portfolio of just say hurricane related cat insurance) or is it just a diversified basket approach. If the latter, can the investor view the component insurance contracts of an ILS to make comparisons between different ILS's?

[Parsad]

Looks like ILS ( https://en.wikipedia.org/wiki/Insurance-Linked_Securities_%28ILS%29 ) are sexy hot. ;)

 

Is there a risk in this field similar to risk with other structured finance products? Something like if huge cat hits, the buyers go bust and you can't offload ILS that you have on your hands?

 

Is there counterparty risk for ILSes already sold? Sorry if these are naive questions. :)

 

 

Answers to your questions:

 

Yes, ILS market is one of the fastest growing sectors of the insurance market.  Completely uncorrelated to other asset classes.

 

Yes, there is some risk to the investor, but remember that the ILS portfolios Sequant designs have multiple (generally 10-15) reinsurance contracts so that they are not terribly correlated.  Not unlike say buying a basket of stocks, mixed duration and types of bonds, etc...you can have losses in one or two of the contracts, but losses in all is very unlikely.  In terms of unloading the risk, the cells are fully collateralized, and are not held by Sequant...so no counterparty risk at all to Sequant...we are essentially the broker.

 

Yes, there are multiple types of insurance linked securities out there, and you can buy counter-party insurance for those securities...catastrophe bonds are an example of existing ILS's.  But no one is doing what Sequant is doing, where the portfolios are in investment cells, fully collateralized, and eventually will have a tradeable platform in the future, not unlike investors simply buying ETF's on exchanges.

 

Cheers!

 

Forgive me if this question is a little basic but for an investor buying ILS's, do they have a choice in which risks to participate (i.e. construct a portfolio of just say hurricane related cat insurance) or is it just a diversified basket approach. If the latter, can the investor view the component insurance contracts of an ILS to make comparisons between different ILS's?

 

No problem!  The answer is either.  Sequant can assemble a specific basket for you, or if you want specific exposures, they will customize it based on your request. 

 

In terms of the components and inspecting them...Redskin212...know the answer?  I suspect there is a certain amount of confidentiality around the insurer that is looking for reinsurance, so the identity would not be provided, but the quality of the insurer (AA, A, B, etc) could probably be disclosed. 

 

Cheers!

[netnet]

For those of you who have not been paying attention, here is the Parsad's bulls-eye.

 

Investors should be focused on two things:  Is our net operating revenue growing when one-time costs are removed?  Is book/value per share increasing over time?  As one-time costs dissipate and our operating businesses continue to grow, we expect that to happen.  Take a look at our growth in revenues at the Burnaby Clinic.  That business has about a 60% gross margin, but 28% net profit margin now at the levels it is running at!  It's not even running at 40% of capacity yet!  This was doing nothing last year and had a massive burden of payables.  It's reputation was a laughingstock!  Recently, we were the only clinic in Western Canada selected for an Alzheimer's drug trial.  We have about 70-80 different doctors referring to us now with patients from BC, Alberta and Vancouver Island..

[undervalued]

Anyone here had any success buying PRDGF through IB? I've seen a few questions but no one give an answer. I just tried putting an order and it asked me to login to Account Management. Not sure which step I am missing. I will ask customer rep.

[TwoCitiesCapital]

Anyone here had any success buying PRDGF through IB? I've seen a few questions but no one give an answer. I just tried putting an order and it asked me to login to Account Management. Not sure which step I am missing. I will ask customer rep.

 

They wouldn't let me transfer it when I moved my account over, so I doubt they trade it.

[ourkid8]

Premier Diversified Holdings Inc. ("Premier") (CSE: PDH) announces that on September 30, 2015 it acquired 7.50 units of Bentley Homes Limited Partnership ("BHLP") for a total subscription price of $375,000, paid in cash. Premier acquired the units for investment purposes. BHLP is a newly formed limited partnership which was formed for the purpose of acquiring a certain property development opportunity in Vancouver, B.C. BHLP intends to develop a four unit residential housing complex on a lot located in an east Vancouver neighbourhood. The development will be managed by BHLP 's general partner, Bentley Homes Ltd., which is managed by a team from Kingswood Asset Management, a Vancouver-based real estate investment firm. “Kingswood has a terrific management team in Ketan Ladva, Sanjiv Sheth and Vipul Pachchigar”, stated Sanjeev Parsad, CEO of PDH. “In real estate, managing leverage and minimizing downside risk are essential over the real estate cycle. Kingswood’s team understands that and we look forward to a long and rewarding relationship with them.” Premier will not be active in the management or operations of BHLP, Bentley Homes Ltd. or Kingswood Asset Management. More information about Kingswood Asset Management may be found at www.kingswood.ca

[rkbabang]

Premier Diversified Holdings Inc. ("Premier") (CSE: PDH) announces that on September 30, 2015 it acquired 7.50 units of Bentley Homes Limited Partnership ("BHLP") for a total subscription price of $375,000, paid in cash. Premier acquired the units for investment purposes. BHLP is a newly formed limited partnership which was formed for the purpose of acquiring a certain property development opportunity in Vancouver, B.C. BHLP intends to develop a four unit residential housing complex on a lot located in an east Vancouver neighbourhood. The development will be managed by BHLP 's general partner, Bentley Homes Ltd., which is managed by a team from Kingswood Asset Management, a Vancouver-based real estate investment firm. “Kingswood has a terrific management team in Ketan Ladva, Sanjiv Sheth and Vipul Pachchigar”, stated Sanjeev Parsad, CEO of PDH. “In real estate, managing leverage and minimizing downside risk are essential over the real estate cycle. Kingswood’s team understands that and we look forward to a long and rewarding relationship with them.” Premier will not be active in the management or operations of BHLP, Bentley Homes Ltd. or Kingswood Asset Management. More information about Kingswood Asset Management may be found at www.kingswood.ca

 

I don't follow the Canadian real estate market, but I was under the impression that it was in bubble territory at the moment.  Is there any fear that it will burst and make this an unprofitable venture?

 

[Uccmal]

Premier Diversified Holdings Inc. ("Premier") (CSE: PDH) announces that on September 30, 2015 it acquired 7.50 units of Bentley Homes Limited Partnership ("BHLP") for a total subscription price of $375,000, paid in cash. Premier acquired the units for investment purposes. BHLP is a newly formed limited partnership which was formed for the purpose of acquiring a certain property development opportunity in Vancouver, B.C. BHLP intends to develop a four unit residential housing complex on a lot located in an east Vancouver neighbourhood. The development will be managed by BHLP 's general partner, Bentley Homes Ltd., which is managed by a team from Kingswood Asset Management, a Vancouver-based real estate investment firm. “Kingswood has a terrific management team in Ketan Ladva, Sanjiv Sheth and Vipul Pachchigar”, stated Sanjeev Parsad, CEO of PDH. “In real estate, managing leverage and minimizing downside risk are essential over the real estate cycle. Kingswood’s team understands that and we look forward to a long and rewarding relationship with them.” Premier will not be active in the management or operations of BHLP, Bentley Homes Ltd. or Kingswood Asset Management. More information about Kingswood Asset Management may be found at www.kingswood.ca

 

I don't follow the Canadian real estate market, but I was under the impression that it was in bubble territory at the moment.  Is there any fear that it will burst and make this an unprofitable venture?

 

I am guessing you have never been to Vancouver Rkbabang?  Housing in Van. is likely in a bubble, but it may always be a very high priced market.  Vancouver is sandwiched between the mountains and the sea.  There is limited land available for residential housing.  As it is people have built in steadily more dangerous areas up the mountainsides.  The closest corollary I can come up with where I have visited is San Francisco.  Like SF, Van. is spectacularly beautiful, if a little damp for my tastes (The surrounding mountains are a rainforest).  The difference from Sf is there is no significant suburban context (Oakland) to take the pressure off.  Everything up or down the coast or farther up the Fraser Valley is mountainous.  Building highways into and out of the city in any direction is insanely expensive.

 

My read is the supply for multiple residential units hasn't kept pace with demand.  Van. keeps growing and there is nowhere to go except vertical.  Sanj. has lived there his whole life so I think he has a general idea what is going on, being a value investor and all.

[rkbabang]

Premier Diversified Holdings Inc. ("Premier") (CSE: PDH) announces that on September 30, 2015 it acquired 7.50 units of Bentley Homes Limited Partnership ("BHLP") for a total subscription price of $375,000, paid in cash. Premier acquired the units for investment purposes. BHLP is a newly formed limited partnership which was formed for the purpose of acquiring a certain property development opportunity in Vancouver, B.C. BHLP intends to develop a four unit residential housing complex on a lot located in an east Vancouver neighbourhood. The development will be managed by BHLP 's general partner, Bentley Homes Ltd., which is managed by a team from Kingswood Asset Management, a Vancouver-based real estate investment firm. “Kingswood has a terrific management team in Ketan Ladva, Sanjiv Sheth and Vipul Pachchigar”, stated Sanjeev Parsad, CEO of PDH. “In real estate, managing leverage and minimizing downside risk are essential over the real estate cycle. Kingswood’s team understands that and we look forward to a long and rewarding relationship with them.” Premier will not be active in the management or operations of BHLP, Bentley Homes Ltd. or Kingswood Asset Management. More information about Kingswood Asset Management may be found at www.kingswood.ca

 

I don't follow the Canadian real estate market, but I was under the impression that it was in bubble territory at the moment.  Is there any fear that it will burst and make this an unprofitable venture?

 

I am guessing you have never been to Vancouver Rkbabang?  Housing in Van. is likely in a bubble, but it may always be a very high priced market.  Vancouver is sandwiched between the mountains and the sea.  There is limited land available for residential housing.  As it is people have built in steadily more dangerous areas up the mountainsides.  The closest corollary I can come up with where I have visited is San Francisco.  Like SF, Van. is spectacularly beautiful, if a little damp for my tastes (The surrounding mountains are a rainforest).  The difference from Sf is there is no significant suburban context (Oakland) to take the pressure off.  Everything up or down the coast or farther up the Fraser Valley is mountainous.  Building highways into and out of the city in any direction is insanely expensive.

 

My read is the supply for multiple residential units hasn't kept pace with demand.  Van. keeps growing and there is nowhere to go except vertical.  Sanj. has lived there his whole life so I think he has a general idea what is going on, being a value investor and all.

 

 

No I never have, which is why I was asking.  I've been to Vancouver, Washington, but never Vancouver, BC, and even that was about 15 years ago. The whole of my knowledge of the real estate situation is hearing people say or reading about the "Canadian real estate market" being overvalued.  I realize that Canada is quite a large place and you can't take a generalization of the entire country and apply it to every local situation. Thanks for adding a little color to my very limited understanding.

[wisdom]

Vancouver RE is most likely a bubble, but, without knowing the specifics of the deal it is impossible to comment on the investment. It depends on the opportunity (city offers opporunities for rezoning of properties) and time line of the project. Additional opportunities can arise if the market or seller are not well informed about future plans for the neighbourhood.

[RichardGibbons]

What Uccmal said is the second most popular local meme. However, for some reason the "lack of space" shows up only in housing prices, not in rents.  If the meme were actually true, then rents would be much higher.  Once you start looking at price to rent ratios, the bubble is pretty obvious.

 

(The key difference is--which I figure you in particular will appreciate--is that you can't borrow massive amounts of money subsidized heavily by the government in order to rent real estate.  You can do so in order to buy. Government interference has distorted the Vancouver market to a huge degree.)

 

 

[rkbabang]

What Uccmal said is the second most popular local meme. However, for some reason the "lack of space" shows up only in housing prices, not in rents.  If the meme were actually true, then rents would be much higher.  Once you start looking at price to rent ratios, the bubble is pretty obvious.

 

(The key difference is--which I figure you in particular will appreciate--is that you can't borrow massive amounts of money subsidized heavily by the government in order to rent real estate.  You can do so in order to buy. Government interference has distorted the Vancouver market to a huge degree.)

 

That is usually the reason for bubbles of this type.  I just searched for Vancouver properties on 16th Avenue and all I can say is wow, is this for real? 

 

http://www.rew.ca/properties/V1129657/1187-west-16th-avenue-vancouver?property_search=342843227

 

This would be about $300K where I am.

[rkbabang]

And you are correct, rents do not appear to be all that high, compared with paying $millions to buy a 2500sqft duplex.

 

https://renthello.com/?search=West%2016th%20Avenue,%20Vancouver,%20BC,%20Canada

 

[nodnub]

What Uccmal said is the second most popular local meme. However, for some reason the "lack of space" shows up only in housing prices, not in rents.  If the meme were actually true, then rents would be much higher.  Once you start looking at price to rent ratios, the bubble is pretty obvious.

 

(The key difference is--which I figure you in particular will appreciate--is that you can't borrow massive amounts of money subsidized heavily by the government in order to rent real estate.  You can do so in order to buy. Government interference has distorted the Vancouver market to a huge degree.)

 

I agree properties are highly priced and the price-to-rent ratio is high... I have been singing this tune for a long time.  The ratio might normalize by rising rents.

[wisdom]

How will the rents rise?

 

1) growth in income - there has been no growth in income plus the resource industry is hurting.

2) job growth - housing is already 7% of GDP. US is under 4%. I don't see where the job growth is going to come from.

3) shortage of rentals - every detached house seems to have 1 to 2 rental suites since the house prices are unaffordable. Where will the shortage come from.

4) immigration - slows down when there is a slow down in the economy. Check out the federal elections - 2 tiered Canadian citizenship or the discussion on Niqab's. It has already started. Or the talk that Asians are buying up all our real estate. This is all in reponse to a slowing economy where immigrants face a backlash.

 

It is a different story if you have property re-zoned, change it to high density, sub-divide, etc.

 

 

[rkbabang]

Back to PDH specifically, I wonder if the plan for this RE venture is to build the 4 units then sell them while the prices are still high, or to keep them and manage them?  From the blurb that was posted it sounds like the latter.