FG Reinsurance, a subsidiary of FG Financial Group, has created a reinsurance sidecar to provide its clients with collateralised and other capabilities.

Dubbed FG Re Investors I, the new sidecar enables the company to boost its reinsurance business.

It is capable of raising third-party investor capital to fund its operations.

The sidecar has already selected Castle Placement as its exclusive placement partner to raise capital.

FG Financial Group CEO Larry Swets said: “The reinsurance market is the strongest we have seen in many decades, presenting compelling opportunities to write attractive contracts.

“Since launching our reinsurance business we have grown the number of insurers and reinsurers that we support and remain focused on continuing to drive profitable growth.

“The creation of a reinsurance sidecar provides us with another means of leveraging our underwriting capabilities to execute our strategy of deploying capital in compelling, and frequently unique asymmetrical risk reward opportunities.”

FG Financial primarily offers reinsurance and asset management solutions in collateralised and loss capped reinsurance and merchant banking sectors.

FG Financial Group chairman and fundamental global CEO Kyle Cerminara said: “This structure enables us to source a new revenue stream from the fee income that we will earn utilising our existing reinsurance platform.

“We remain focused on patiently allocating capital to drive long-term shareholder value.”

In September this year, the company announced the establishment of a merchant banking unit to drive its growth.