Insurance, reinsurance and financial services group Allied World Assurance Company Holdings, AG has announced another deal which enhances its abilities across its investment and third-party capital management platform, Allied World Financial Services. It have signed an investment agreement which sees it acquire a minority stake in asset manager Crescent Capital Group LP and as part of the deal Crescent will manage $500m of Allied World’s investment portfolio.
In December Allied World announced a deal to acquire a minority stake in specialist collateralized reinsurance investment manager Aeolus Capital Management Ltd., giving it an enhanced ability to take on third-party capital to underwrite premiums with. This latest deal with Crescent Capital sees Allied World secure the services of an asset manager who specialise in managing portfolios of public and private below investment grade assets spanning the entire credit capital structure.
Allied World are increasingly moving towards a hedge fund backed re/insurer type strategy, with these new asset management facilities, and clearly intend to put as much effort into profiting from investment of the premiums made from the business it underwrites as it does from the underwriting itself. This will please investors in the group and signifies a continuing move by insurers and reinsurers to make asset management a growing source of income and profits.
“Crescent Capital has over 20 years of experience investing in below investment grade credit and structured products, and I am extremely confident in its management team and investment process,” said Scott Carmilani, President and CEO of Allied World. “Mark Attanasio, Jean-Marc Chapus and their investment team have a proven track record of generating strong returns for Crescent’s client base. Their investment strategies complement Allied World’s existing credit strategies and relationships, and we believe this will be an extremely beneficial relationship for both parties.”
John Gauthier, President of Allied World Financial Services, commented; “Since the launch of our financial services platform, we have announced four strategic partnerships that complement our core insurance and reinsurance operations. We believe these deals will help Allied World manage our expenses, optimize our investments returns, and over time, provide earnings to AWH shareholders. The Crescent transaction, with its diverse credit strategies, will complement our previously announced transactions, and we are excited about welcoming the Crescent team into our financial services family.”
“We are confident our partnership with Allied World will enhance our ability to serve the growing needs of investors looking for proven credit strategies that deliver differentiated risk-adjusted returns,” added Mark Attanasio, Co-Founder and Managing Partner of Crescent Capital. “This investment demonstrates Allied World’s confidence in our investment process, people and performance, all of which we have been proud of since founding the group over two decades ago. Jean-Marc Chapus and I, and our team are excited to work with our new partner.”
Allied World will, under the terms of the deal, pass $500m of its investment portfolio to Crescent Capital to be deployed across a range of diversified credit strategies over the next few years.