Aspen Insurance 2008 hedge fund losses reach $47M

Aspen Insurance Holdings Ltd. on Friday said it lost $47.4 million in its investment portfolio this year through Sept. 30 because of the market turmoil.

The Bermuda-based insurance and reinsurance company said its holdings in funds of hedge funds, which represented about 9 percent of its investment portfolio as of June 30, fell 7.4 percent in the third quarter, including 4.7 percent in September alone.

The third-quarter drop represented a $41.3 million loss.

Aspen said the results are preliminary and subject to change.

The company said it held no stock in Lehman Brothers Holdings Inc., American International Group Inc., Fannie Mae, Freddie Mac or Washington Mutual in its direct investment portfolio.

But Aspen repeated details disclosed Sept. 15 that it held about $38 million in Lehman securities, including $30 million in senior debt and $8 million in subordinated debt. Aspen said its holdings in Lehman represented less than 0.7 percent of its total investment portfolio.

It also held less than $2 million held in bonds issued by AIG subsidiaries.

Its funds of hedge funds may have some exposure to these companies or their debt, Aspen said.

The company also estimated its preliminary after-tax losses totaled $14 million for Hurricane Gustav and $141 million for Hurricane Ike, net of reinsurance.

Aspen will release its third-quarter results on Oct. 29 after the market closes.

In morning trading, Aspen shares added 69 cents, or 3.9 percent, to $18.57. However, they earlier hit a new 52-week low of $16. They have ranged from $17.88 to $32.42 over the past year.