Cohen & Co yields 8% by lending to unrated insurance companies

Small firms in ‘the safest industry in the world’ can’t raise capital, creating a trading opportunity

Cohen & Company is earning a yield of more than 8% by lending money for non-life insurers in the US, Europe and Bermuda to use as regulatory capital.

The asset manager provides unrated small and medium-sized insurers with long-term private debt in either dollars or euros that counts towards their regulators’ capital requirements.

The strategy provides “high-yield returns for a high investment-grade default rate,” says John Butler, the managing director of Cohen & Co’s dollar-denominated funds