(updated with correction)
White Mountains Advisors, the investment management arm of White Mountains Insurance Group overseeing about $34 billion in assets, has taken a 7.5% stake in emerging hedge fund manager Oakum Bay Capital, confirmed Brooke S. Parish, Oakum Bay's president and CEO, in an interview.
White Mountains Advisors also will invest $10 million in Oakum Bay's long/short hedge fund bringing assets of the fund to $70 million, Mr. Parish said. About 40% of the fund's assets are from institutional investors.
G. Manning Rountree, president of White Mountains Advisors, confirmed the hedge fund investment and the insurer's minority ownership of Oakum Bay but declined to disclose the purchase price.
As part of the agreement, Oakum Bay's founder, Kernan “Kip” Oberting, will rejoin White Mountains as a senior partner, overseeing the insurer's investment in his former company and “pursuing strategic opportunities for White Mountains,” according to a joint news release from both firms. He will remain chairman of Oakum Bay.
Mr. Oberting worked at White Mountains for nine years, overseeing merger and acquisition activity. He left the firm in 2004 to join Montpelier Re, a reinsurance company, as executive vice president. Mr. Oberting left in 2008 and went on to found KVO Capital Management, the predecessor company of Oakum Bay. Montpelier Re seeded KVO with $100 million that was managed in a separate account for a three-year period.