XL Group and Stone Point Capital have formed a new Bermuda-based company to act as an investment manager in insurance-linked securities and other reinsurance capital markets products. XL has a 75% stake while Stone Point has 25%. XL and Stone Point plan to invest up to $135 million in funds to be formed, alongside potential third party investors. The company’s name was not disclosed.Todd Freed and Andrew Alin of Skadden advised Stone Point.
DUBLIN, Ireland, July 25, 2013 /PRNewswire/ — XL Group (“XL”) (NYSE: XL) and private equity firm Stone Point Capital LLC (“Stone Point”) announced today the formation of a new Bermuda-based company to act as an investment manager in insurance-linked securities (ILS) and other reinsurance capital markets products. XL has a 75% ownership stake in the company and funds managed by Stone Point have the remaining 25% ownership.
When operations are fully commenced, the focus of the company will be on ILS and index-linked products as well as on XL-designed reinsurance products. The parties intend to invest up to an aggregate of $135 million in funds to be formed, alongside potential third party investors. The new company will offer investors unique access to both reinsurance capital markets products as well as more traditional reinsurance opportunities, including certain risks currently written by XL. Investors will also benefit from XL’s underwriting excellence, strong enterprise risk management, analytical strength and respected insight in the reinsurance market.
XL Chief Executive Officer, Mike McGavick, said: “Given the combined strength of XL’s 20-plus years of world-class reinsurance underwriting expertise and Stone Point’s proven track record of investment success in the insurance and reinsurance sectors, this initiative fits perfectly with XL’s continuing objective to offer innovative products to our clients and enhance profitability and long term value for shareholders.”
Charles A. Davis, Stone Point’s Chief Executive Officer, said: “Stone Point is delighted to be partnering with XL on this venture. Stone Point’s relationship with XL dates back to 1986 when our team assisted with the formation of the company. We believe that the convergence of the traditional insurance and reinsurance markets, and the capital markets will continue. This initiative with XL is designed to offer third-party investors an opportunity to invest in this asset class in partnership with one of the world’s premiere reinsurance underwriters.”
About XL Group plc
XL Group plc (NYSE: XL), through its subsidiaries, is a global insurance and reinsurance company providing property, casualty and specialty products to industrial, commercial and professional firms, insurance companies and other enterprises throughout the world. XL is the company clients look to for answers to their most complex risks and to help move their world forward. To learn more, visit www.xlgroup.com
About Stone Point Capital LLC
Stone Point is a financial services-focused private equity firm based in Greenwich, CT. The firm has raised and managed five private equity funds – the Trident Funds – with aggregate committed capital of more than $9 billion. In addition to the capital invested by the Trident Funds, Stone Point has secured approximately $6 billion of equity co-investments since 2001. Stone Point targets investments in the global financial services industry, including investments in insurance and reinsurance companies, banks and depository institutions, companies that provide outsourced services to financial institutions, asset management firms, insurance distribution and other insurance-related businesses, specialty lending and other credit opportunities, mortgage services companies and employee benefits and healthcare companies. For further information about Stone Point, see www.stonepoint.com.
This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities.
This press release contains forward-looking statements. Statements that are not historical facts, including statements about XL’s beliefs, plans or expectations, are forward-looking statements. These statements are based on current plans, estimates and expectations, all of which involve risk and uncertainty. Actual results may differ materially from those included in such forward-looking statements and therefore you should not place undue reliance on them. A non-exclusive list of the important factors that could cause actual results to differ materially from those in such forward-looking statements include the factors set forth in XL’s reports on Form 10-K, Form 10-Q and other documents on file with the Securities and Exchange Commission. XL undertakes no obligation to update or revise publicly any forward-looking statement, whether as a result of new information, future developments or otherwise.