TIH-owned Starwind Specialty has reached a deal with private equity firm Stone Point to launch Fractal Re, a collateralized reinsurer that will provide capacity to the program manager’s portfolio of casualty programs.
The MGA raised $270mn of equity, including minority investments from Nationwide, Enstar, the TIH investor group and Starwind’s management.
The news comes nearly four months after Insurance Insider revealed that Starwind was working to launch a $200mn-$300mn sidecar to provide capacity for upwards of 30 of its programs.
As part of the deal, Markel’s State National will serve as fronting carrier for the platform.
An Enstar subsidiary will provide sidecar investors with an option to obtain finality through a novation transaction after a certain period. The legacy carrier developed a forward exit option specifically tailored to provide finality to third-party ILS investors.
In addition, Stone Point Credit will serve as the investment manager for Fractal Re, targeting a portfolio of credit strategies to match the vehicle’s liability profile.
“The launch of Fractal Re demonstrates Starwind’s ability to meet the needs of our customers and distribution partners by expanding our casualty and specialty capacity,” said Bill Goldstein, TIH Underwriting CEO.
Stone Point co-CEO Jim Carey added, “We believe Stone Point Credit’s experience managing capital for the insurance industry, combined with Starwind’s market leading underwriting, will enable us to generate substantial value for all stakeholders.”
J.P. Morgan Securities served as sole placement agent, while BMS Capital Advisory acted as financial advisor on the transaction.
Starwind’s sidecar builds on the momentum that TIH has already generated in third-party capital raising via the AmRisc Trouvaille Re sidecar launched earlier this year.
The $325mn of underwriting capital raised provides collateralized reinsurance capacity for AmRisc’s coastal commercial E&S property insurance portfolio.