B.P. Marsh & Partners Plc, the specialist private equity investor,
announced it is investing in a new collateralized reinsurer that aims to support growth in its long-time investee company
XPT Group, the U.S. wholesale insurance broking and underwriting agency platform.
B.P. Marsh has committed a maximum of $5 million to the f
ormation of Gambit Risk Finance (Gambit Re), of which $1,875 million will be funded on completion, the com
pany said in a London Stock Exchange filing. In return, B.P. Marsh will
receive a preferred equity shareholding of approximately 8%, which carries an 8% preferred annual return.
Gambit Re will support XPT's strategic growth ambitions and enhance its operational and financial flexibility
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y by enabling XPT’s underwriting arm, Platinum Specialty Underwriters
, to provide risk capital for selected underwriting programs within its insurance portfolio.
Gambit Re will initially support five profitable Platinum programs across its underwriting portfolio, said B.P.
Marsh, highlighted that the reinsurer “is expected to deliver a strong risk-adjusted return, underpinned by Platinum’s historical unde
rwriting discipline.”
Gambit Re’s capital structure is composed of $60 million of preferred equity, with participation from:
Accord Capital Investments (providing $45 million),
RSP, a vehicle formed by XPT senior management (providing $10 million), and
B.P. Marsh (providing $5 million).
Accord Capital is a Chicago-based alternative lending and capital advisory firm, which offers strategic capital a
nd operational guidance to entrepreneurial teams from early-stage startups to mature enterprises.
Management and operational services will be provided by Platinum, with reinsurance administration outso
rced to Atlantic Security Ltd., a Bermuda-based specialist.
B.P. Marsh said it sees this investment as an opportunity to support one of its experienced management teams with a good track record in the sector.
“We are confident that Gambit Re can deliver long term returns to our s
hareholders, further building on our ability to source and make unique investment opportunities in the i
nsurance sector, alongside our primary focus on insurance distribution investments,” said London-headquartered B.P. Marsh, which owns a 29% stake in XPT.