XL CIO Street to assist alternative capital innovation post Catlin deal

by Artemis on February 24, 2015

The leadership of XL Group following its proposed acquisition of Catlin is taking shape and the combined firm will have a different Chief Investment Officer after XL announced that Sarah Street will assume new responsibilities with a focus on alternative capital.

Street is currently an EVP and CIO for insurance and reinsurance firm XL Group, but in an SEC filing the firm announced that she would be moving from the current role to assume new responsibilities on the closing the acquisition of Catlin Group.

Street has led XL’s Investment Team for eight years but according to the announcement has expressed an interest in moving to a new role at the firm in line with responsibilities she has held in strategy and innovation.

As a result Street will move into what seems a varied role, with a focus on alternative capital, insurance-linked securities (ILS), strategy for the combined firm and innovation.

Street will partner with members of XL’s leadership team after the closing of the acquisition to establish a Strategy Council.

She will continue as Non-Executive Chairman of the firm’s Bermuda based insurance-linked securities (ILS) and reinsurance-linked asset manager New Ocean Capital Management Limited, a joint-venture that XL established alongside private equity specialists Stone Point Capital LLC.

Street will also “assist in the further build-out of other alternative capital efforts”, as well as continue to lead key-innovation initiatives at the combined XL-Catlin.

Both XL and Catlin have third-party reinsurance capital under management and a number of alternative capital initiatives. XL’s is largely focused on New Ocean, while Catlin has around $350m of third-party funds in its Special Purpose Syndicates (SPS) at Lloyd’s of London and Portfolio Participation Vehicle (PPV).

The opportunities in alternative capital management that will be presented as the two firms come together will require strategic direction and focus, something Street may be able to provide in the new role.

When the acquisition was announced XL explained that the deal would “Significantly increase its attractiveness and flexibility to third-party capital providers” and CEO McGavick said the deal “Creates a top 10 reinsurer with expanded alternative capital capabilities.”

McGavick also commented that the combined XL – Catlin would become a “perfect partner for investors” in the ILS and third-party capital space, McGavick declared. “You want to be a leader when there’s change like this,” McGavick said referring to the alternative capital trend, “this deal positions us as one.”

The current importance of alternative capital to insurance and reinsurance firms as they merge and acquire is clear. There is no time for re/insurers to sit back and hope that third-party capital will come to them anymore, the structural change faced by reinsurers due to alternative capital requires a strategic response. Street is positioning herself to be able to lead that response for the firm.

Chief Financial Officer of Catlin, Benji Meuli, is expected to assume the empty position of Chief Investment Officer once the acquisition is closed.

Also read:

Catlin grows third-party reinsurance capital managed to $350m.

Combined XL – Catlin a “perfect partner” for third-party capital: McGavick.

XL buys Catlin for £2.79B. Makes XL more attractive to third-party capital.

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