Fermat leads €10m private debt deal for Gefion Insurance A/S

Insurance-linked securities (ILS), catastrophe bond and reinsurance linked investment specialist Fermat Capital Management, LLC has completed a €10 million private subordinated debt placement for Danish non-life insurer Gefion Insurance A/S.

Fermat Capital Management has in recent months expanded its investment strategy to include private debt transactions, joining other ILS fund managers who look on private debt as an alternative way to access the insurance or reinsurance-linked returns of a sponsor.

In this transaction Gefion Insurance A/S said it has closed a private placement of Solvency II-compliant subordinated notes, with an aggregate principal amount of €10 million, with funds under the management of Fermat Capital Management, LLC.

Reinsurance broking specialist TigerRisk Capital Markets & Advisory acted as advisor to Gefion for this private debt transaction, and law firm Gorrissen Federspiel acted as counsel.

Tonny Anker-Svendsen, Gefion’s CEO, commented on the transaction; “We are excited to partner with Fermat, one of the highest-quality investors in the (re)insurance space, on this transaction. We believe their commitment validates the strength of our innovative business model and our ability to source profitable growth opportunities in the European specialty market.”

Gefion said it intends to use the net proceeds from the debt issuance to support growth opportunities in the European specialty non-life insurance market, as well as to refund its existing subordinated debt, and for other general corporate purposes.

Private debt arrangements such as this see ILS fund managers like Fermat Capital Management broadening their provision of capital to re/insurers, to offer capital support across the risk/return spectrum and help companies better optimise their capital and risk profile.