Billionaire hedge fund executive Steven Cohen is dipping his toe even further into the reinsurance market with the purchase of a 5.2 percent stake in Bermuda-based Validus Re.The stock purchase by Mr Cohen’s SAC Capital Advisors’ is a passive investment, which means the company is not looking to influence the direction of Validus Re but does indicate Mr Cohen’s ongoing interest in the reinsurance industry.The news comes on the heels of the announcement that Mr Cohen’s company SAC Capital Advisors is looking to open SAC Re in Bermuda early in 2012. Former Lancashire Holdings boss, Simon Burton, was chosen to head up the new reinsurer.According to Reuters, SAC Re will concentrate on property and casualty coverage.Mr Cohen is one of a handful of hedge fund billionaires entering the reinsurance market, following behind David Einhorn of Greenlight Capital and Daniel Loeb of Third Point.“I call it the sheep theory,” said industry consultant Andrew Barile to Reuters in October when plans for SAC Re were announced in October. “When one sheep leaves the barn they all follow and it is exactly the same with the hedge funds. When one successful manager makes the decision to go into reinsurance, the others follow.”“We haven’t had a lot of new reinsurers launched in the last five years, but that is clearly changing,” he added.SAC Capital Advisors control $14 billion in assets and in September, Forbes estimated Mr Cohen’s net worth to be $8.3 billion.