Sequant Re Holdings to liquidate

Sequant Re Holdings Ltd., the specialist Bermudian collateralized reinsurance and insurance-linked securities (ILS) investments start-up, is to liquidate its business having struggled to raise sufficient capital for underwriting.

Sequant Re had been seeking to raise funding for a business that would underwrite fully collateralized reinsurance transactions backed by the issuance of insurance-linked securities and third-party investor capital.

The firm was founded by Guy Cloutier in late 2014, an executive with more than 35 years of experience in the insurance and reinsurance markets, including as head actuary at American Safety Reinsurance and with 15 years of Bermuda reinsurance market experience.

Sequant Re aimed to lower the barriers to entry for investors seeking access to ILS investments by custom underwriting portfolios and solutions to meet their needs, offering a strategy employing ILS techniques alongside Bermuda’s segregated account structure to offer a platform for the transfer and securitisation of insurance risks.

Now, Sequant Re is set to fold and liquidate, having failed to raise sufficient capital from an anchor investor.

Cloutier told Artemis, “We spent a considerable amount of time and resources in discussions with a potential significant strategic partner. At the end of the day, they did not proceed due to their perceived US tax implications.

“Unfortunately, we did not have enough resources to continue. I absolutely believe that the ILS sector is a huge force in the reinsurance market and the growth numbers speak for themselves.”

Long-time partner and investor in Sequant, Premier Diversified Holdings Inc., has written down its investments in the firm as a result of the decision to liquidate.

“After three years of commitment to locating an institutional partner to fund Sequant’s ILS (Insurance Linked Security) portfolio, it has regrettably come to an unfavourable conclusion,” explained Sanjeev Parsad, CEO of Premier Diversified Holdings.  “While there was a multitude of interest, meetings and significant due diligence conducted on Sequant, none of the interest materialized into a firm commitment.  As such, the board of Sequant decided it was time to move the company into voluntary liquidation.”

Premier’s investments in Sequant Re totalled approximately $2.5 million and have now been written down to zero on the expected liquidation.

It’s a sad end for the ILS start-up. Cloutier and his team employed a solid strategy that would have benefited investors looking to enter the space with a more customised approach to creating portfolios of risk. Artemis wishes him and the Sequant team well in their future ventures.

Join us on February 2nd in New York for our upcoming ILS conference