Managing general underwriter (MGU) SageSure has completed an investment in Pillar Capital Management, a Bermuda-based insurance-linked securities (ILS) fund manager with more than $4bn under management.
The US-based underwriter funded the deal by expanding its existing debt facility with Ares Management.
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Pillar will continue to run as an independent franchise, keeping its current investment strategy and Bermuda-based workforce.
Stephen Velotti, Pillar’s long-time CEO and chief investment officer, will keep leading the business alongside chief operating officer Tara Railton.
Pillar’s executive management team will also hold a “substantial” stake in the company.
SageSure president and CEO Terrence McLean said: “For nearly two decades, Pillar has built a world-class platform and deep relationships with global institutional investors through a relentless focus on strong technical underwriting and prudent risk management, two principles which are core to our ethos at SageSure. For those reasons, I believe the two organisations could not be a better fit as partners.”
The transaction brings Pillar’s reinsurance risk underwriting operations and institutional investor base onto SageSure’s platform, widening the MGU’s access to alternative capital across the property catastrophe reinsurance value chain.
It also connects SageSure’s risk analytics and underwriting infrastructure with Pillar’s multi-strategy ILS deployment, which allocates capital to property catastrophe reinsurance, retrocession, catastrophe bonds and industry loss warranties.
Founded in 2008, Pillar manages non-correlated catastrophe assets for institutional clients.
SageSure operates in 16 US states, across catastrophe-exposed residential and commercial property markets, and serves nearly one million policyholders while managing more than $3bn in in-force premium.
Velotti added: “We are excited to embark on this next chapter with SageSure. While our core strategy, our team and the way we serve our investor partners will remain unchanged, partnership with SageSure will further enhance our ability to access, evaluate and manage catastrophe risk and allow us to continue delivering industry-leading results.”
SageSure announced in March this year that it had closed its second reinsurance sidecar transaction with Seawall Re II, securing $200m in capital.
