Watch the video of this part of the fireside chat on Gamma Prime’s YouTube channel:
Fireside chat with Jay Madhu (CEO/Chairman at SurancePlus) and Evan Szu (Co-Founder and CEO at Gamma Prime)
In this part of conversation, Gamma Prime’s Evan Szu and SurancePlus CEO Jay Madhu explore how tokenized reinsurance offers a truly uncorrelated asset class, discuss bringing crypto-native companies to public markets, and reveal insights from Jay’s upcoming IPO for Oxbridge Re Holdings (OXBR) and the planned spin-out of SurancePlus.
Evan Szu (Gamma Prime)
Okay, everyone, this is Mr. Jay Madhu. Jay is the CEO of Surance, is that right?
Yeah, and Surance has been one of our longtime hedge funds. They are the primary example of what we do best, which is uncorrelated yield. They do reinsurance.
Jay, tell us a little bit about the company, yourself, what you’ve been up to?
Jay Madhu (SurancePlus)
Yeah, so we’re a reinsurance company. We tokenize reinsurance. We’re a publicly traded company listed on the NASDAQ. We’re the first public company to tokenize a RWA in reinsurance. SurancePlus is the name of the company.
So over the last, we’ve been in business for the last 12 years. Three years ago, we turned around and started SurancePlus, raised capital, issued a tokenized security, and put the capital to work in the RWA space of reinsurance. We’re a direct reinsurer.
We don’t do anything with the ILW, ILS markets, and as a direct reinsurer, you don’t have any middlemen that take fees out. What we do is we target two tokens: one with a 42% return, which is our high yield token, and the other is a balanced yield token that targets a 20% return.
Evan
Tokenized yield is 42%, as in four and two?
Jay
Yes.
Evan
That’s amazing.
Jay
Yeah, and as a public company, there’s plenty of information about us with the SEC where we’ve done that, raised capital, issued tokens, and more importantly, paid out.
Evan
One of the things we really love about Jay and his company is reinsurance is as orthogonal, as non-correlated as it gets. If the stock market goes down, your tokens don’t budge.
Jay
It’s totally uncorrelated. It’s not affected by capital markets. We don’t take any risk outside of reinsurance. The monies that we raise are put into reinsurance. They’re held in trust accounts. We don’t use additional leverage. So there’s no looping strategies, no various other interesting strategies that some folks might use.
We write one-to-one. We’re in the business of taking risk, executing risk, and managing capital. The monies are held in trust accounts in large US banks. We issue a tokenized security that mirrors the fortunes of the contract, and these are one-year tokens. At the end, we pay out depending on the fortune.
Evan
So Jay, what are you up to recently that’s interesting?
Well, I’ll just tell you straight up. He’s taking a company public, which is very hot right now in the tokenization space. As you know, Circle went public. It’s up 600%. Jay have actually taken multiple companies public before, and we want to get insights into that intersection space: what the crypto world looks like with public markets, how to prepare, and what steps to take. Very few people have taken companies public that have crypto as a foundation.
Jay
My background is capital markets. I’ve been part of four companies that have gone public, three on the NASDAQ, one on the New York Stock Exchange. Something important in today’s day and age is that there are two completely different thought processes: crypto on one side, RWAs on the other. Tokenized securities are two different assets, two completely different ecosystems. Nothing wrong with one or the other.
In public capital markets, companies are really worried about compliance and what the underlying security is. We fit both. As a reinsurance company, when we take on capital, it is validated by multiple sets of auditors, and the audits we do are in the real-world side, not the blockchain space.
The audits we do are PCAOB audits. A PCAOB audit is extremely tough, expensive, and very time-consuming. We do those audits with SurancePlus because the goal is to spin SurancePlus out into its own publicly traded company in short order.
Evan
Public markets are probably one of the hottest areas for crypto right now, but very few companies can prepare because the process is long and the compliance is deep. You need an actual business model.
Do you have an IPO date? Do you have a ticker?
Jay
Yes, ticker symbol is O-X-B-R. Oxbridge Reholdings Limited. Under Oxbridge, we have SurancePlus, which we hope to spin out in short order. We recently made an announcement regarding the thought process.
