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April 1, 2022

Carlyle raises $2.1bn for Fortitude Re; signs new advisory agreement

Bermuda-based multiline reinsurance firm Fortitude Re, which is owned by Carlyle and FGH Parent, is set to receive a capital boost of $2.1bn. 

Investment firm Carlyle announced the equity capital raise from the reinsurer’s existing investors including T&D Insurance Group. 

Carlyle, which will contribute up to $150m in the capital raise, said that the deal furthers its Insurance Solutions strategy and bolsters their presence in the insurance space.

Concurrently, Carlyle signed an advisory services agreement with Fortitude Re through its newly created entity, Carlyle Insurance Solutions Management.

The agreement will see Carlyle offer M&A, transaction origination and execution, and capital management services to Fortitude Re. 

The advisor will charge Fortitude Re a recurring fee based on all of the reinsurer’s general account assets.

Investors who joined the capital raise will also make a minority investment in Carlyle’s advisory unit and share in the fees as per the agreement. 

Carlyle expects the new advisory agreement with Fortitude Re to increase its global credit fee-earning assets under management by $50bn.

Carlyle Insurance Solutions head Brian Schreiber said: “These milestones significantly accelerate our Insurance Solutions strategy and enhance our capabilities to pursue the multi-trillion dollar global market opportunity for legacy liabilities.”

Fortitude Re CEO James Bracken said: “We are very pleased to expand our successful partnership with Carlyle, strengthening Fortitude Re’s capabilities to serve our insurance clients and their policyholders. 

“We expect this strategic agreement with Carlyle, including the significant capital raise, will support our continued growth as a leading global reinsurer of legacy insurance portfolios.”

Separately, Fortitude Re has signed a $4bn annuity reinsurance deal with Taiyo Life Insurance, a wholly-owned subsidiary of T&D Holdings.

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