Armour gets $500m Aquiline-led investment, Validus participates

by Artemis on January 3, 2018

Bermuda-headquartered P&C legacy and run-off reinsurance specialist, as well as founders of ILS Investment Management (ILSIM), Armour Group has raised a $500 million investment round led by private-equity specialists Aquiline Capital Partners to fund further growth.

Armour, which was founded in 2007 by Brad Huntington and John Williams works closely with insurance-linked securities (ILS) funds and particularly with the Credit Suisse Asset Management (CSAM) insurance-linked strategies team as it advises and assists on a successful ILS fund focused on property and casualty run-off opportunities.

Armour said that it has raised $500 million in equity commitments in partnership with an investor group led by Aquiline.

Armour will use the proceeds of the capital raise to fund the establishment of a new reinsurance group, Armour Group Ltd., that will co-invest in global P&C run-off transactions alongside other Armour affiliates.

Additionally, the investment will give the Armour team the growth capital and platform required to execute on what it sees as an expanding run-off market opportunity.

The former Armour holding company is to be renamed to Trebuchet Holdings and the Armour brand name will be transferred over to the new reinsurance group.

Trebuchet Holdings will also contribute its existing P&C run-off platform to the newly established holding company, including Armour’s claims management operation, Armour Risk, and, subject to approvals, the ILS Investment Management (ILSIM) affiliate, which will continue to undertake its existing ILS management and advisory business.

“Aquiline’s investment in Armour reflects the growing demand for run-off as an option for insurance companies that are looking to solve deteriorating reserve positions and optimize their capital,” commented Jeff Greenberg, Chairman and Chief Executive Officer of Aquiline.

“We are excited to partner with the highly-experienced team at Armour and believe that their ILS management capabilities provide a strong competitive differentiator. The formation of our permanent capital vehicle provides the team with the full toolkit to capitalize on the market opportunity,” Greenberg continued

Armour Founder and CEO Brad Huntington also said, “We are excited to have Aquiline as a partner as we enter our next phase of growth. Given Aquiline’s deep insurance industry experience, we believe they are an ideal partner to help us grow the team and scale our operation.”

According to an SEC filing, reinsurance firm Validus Reinsurance, a subsidiary of Validus Holdings, Ltd., is one of the co-investors having committed roughly $40.4 million to a Cayman Islands domiciled vehicle named Aquiline Armour Co-Invest L.P.

It’s clear Validus sees the value in a stake in the new Armour Group Ltd. vehicle, recognising the potential for further growth of the global legacy and run-off reinsurance market.

Armour is a specialist in extracting value from legacy books of business, managing them through to run-off and enabling them to be structured in such a way that investors can benefit from the insurance-linked returns possible from them.

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