Insurance and reinsurance firm AXA XL has acquired all third-party ownership interests in its already majority-owned insurance-linked securities (ILS) asset management affiliate, New Ocean Capital Management Limited.
The move brings New Ocean fully in-house for AXA XL, with the ILS investment unit now set to become a wholly-owned subsidiary of the firm’s Alternative Capital business, under the leadership of Daniel Brookman, AXA XL’s Head of Alternative Capital.
New Ocean Founding CEO Chris McKeown is set to serve as an advisor to AXA XL’s Alternative Capital business for a transitionary period, the company saaid and will also continue as a Director of certain New Ocean managed funds.
Bermuda domiciled ILS and reinsurance linked asset manager New Ocean Capital Management was launched in 2013 by global insurance and reinsurance group XL Group Ltd. alongside private equity specialist Stone Point Capital (SPC).
Japanese conglomerate Mitsui & Co., Ltd. also had a stake in New Ocean, having acquired 15% of the firm and made a $100 million commitment to the managers funds in 2016.
Now it seems AXA XL has bought back those stakes from the third-party investors in New Ocean, providing it with 100% ownership of the alternative reinsurance and ILS capital manager.
Greg Hendrick, CEO of AXA XL commented, “Alternative capital is a core component of our strategy, as we seek to create strategic partnerships matching the risks we initiate with third party capital alongside our own. Our decision to acquire the outstanding shares of New Ocean demonstrates our strategic commitment to the alternative capital space and represents the latest step towards becoming the partner of choice for investors seeking to access (re)insurance risk globally.
“We’d especially like to thank Chris whose dedication and 30 years of experience helped launch and grow New Ocean and bring it to this point where we can start our next chapter in alternative capital management.”
Charles Cooper, Head of AXA XL’s global reinsurance operations added, “Under this consolidated structure, the Alternative Capital business will offer investors a full suite of underwriting, that will leverage AXA XL’s world-class risk origination and underwriting franchise: ILS asset management, utilizing New Ocean’s proven track record and fiduciary experience; and fronting activities/insurance management services for transacting business through AXA XL’s balance sheet, directly supported by our experienced risk and structured finance experts.
“As a key source of risk origination for our Alternative Capital activities lie within our Reinsurance operations, Dan will join our global Reinsurance Leadership Team. The new alignment will help accelerate our alternative capital activity and provide greater flexibility for our underwriters and ultimately our brokers and clients.”
AXA XL said, “New Ocean has been successful in attracting capital from major institutional investors for products which are directly aligned with AXA XL’s global underwriting franchise. Notable success has been achieved to date within the property catastrophe, specialty and whole account lines of business.”
This now positions AXA XL to utilise the ILS management capabilities of New Ocean Capital Management and its funds for itself, aligning them with its broader alternative capital activities that sit underneath Brookman.
So another ILS fund management unit goes fully in-house, adding to the reduction of even semi-independent ILS manager options available to investors.
Of course origination is key and being part of a major global re/insurance group will enable asset management units like New Ocean Capital to grow more rapidly, while AXA XL can benefit from putting its investors efficient third-party capital to work alongside its own capacity.
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