Syncora Holdings Ltd. (fka SYCRF)

[mrholty]

2 very different animals.

VR is Insurance reinsurer who is actively writing new business and the mgmt team is often cited around as some of the best in the business. (FD - this was 2% of my portfolio - now 3% which will probably be split between buy more SYCRF and some others. BTW, it was originally a 5% position but my gains in SYCRF have dwarfed the rest of the portfolio - a good issue to have!)

If you go back and read the annual reports you will see that the CEO reports for several years are that they are both willing to buy in sign of opportunity but also willing to sell if they got the right price. It appears that 1.5 BV was that right price. Refreshing to see a mgmt team do the right thing even if it puts them out of a job.


Syncora is primarily a company that guarantees munibonds (and the type of large infrastructure products, hospitals, utilities) and is currently in runoff with a complicated structure, opaque information about its future (to the public/outside).

As an investor this is good news that the market is open and deals are occuring. If people are interested and willing to pay up for assets that is great. The simplification of our structure plus hopeful cleanup of the lawsuits would make us an asset heavy company that would be an easy tuck in opportunity for someone to hopefully pay 1.0-1.2x book for + something for the optionality of the NOLs.




Full disclosure - addendum:
About 8 years ago I got involved in a subsidiary at the company that I was working at ended up doing a reinsurance deal with VR. 2 years later when we sold the division (due to underperformance) the guys at VR called and were upset that we didn't include them on the list of companies to shop it to. They were not included as they are a reinsurer and not a traditional shop. They viewed themselves as opportunistic and wanting to buy good assets at a fair price. (they knew we were idiots).