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-tim
e 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 formation of Gambit Risk Finance (Gambit Re), of which $1.875 million will be funded on comp
letion, the company said in a London Stock Exchange filing. In return, B.P. Marsh will receive a preferred equity shareho
lding 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 b
y 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, noting that the reinsurer “is expected to deliver a strong risk-adjusted return, underpinned by Platinum’s historical underwriting 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
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B.P. Marsh (providing $5 million).
Accord Capital is a Chicago-based alternative lending and capital advisory firm, which offers strategic capital
and operational guidance to entrepreneurial teams from early-stage startups to mature enterprises.
Management and operational services will be provided by Plati
num, with reinsurance administration outsourced 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 shareholders, further building on our ability to s
ource and make unique investment opportunities in the insurance sector, alongside our primary focus on insurance distribution investments,” said London-headquartered B.P. Marsh, which owns a 29% stake in XPT.