Leading global credit investment specialist Bain Capital Credit, L.P, which has around $40 billion in assets under management, is partnering with Beat Capital Partners Ltd., the long duration investor specialising in the insurance and reinsurance industry, to access returns from the Lloyd’s marketplace.
The partnership will see a dedicated underwriting vehicle created, funded by Bain Capital, that will provide capital to Syndicate 4242 to support Beat’s underwriting businesses operating in the Lloyd’s market.
Alongside the partnership transaction, Bain Capital will take a significant minority investment holding in Beat and will also join its Board of Directors.
“This transaction is an important milestone in the progression of our business that positions Beat for the next phase of our development in a market that offers significant opportunities for growth,” explained John Cavanagh, Chairman of Beat.
“The combination of Bain Capital’s shared vision and underwriting capabilities to support our businesses is deeply compelling. We are pleased to partner with a world-class strategic investor ahead of what will certainly be interesting times for our industry.”
“We are thrilled to partner with Beat to accelerate the evolution of their platform,” added Matt Cannan, a Director at Bain Capital Credit.
“Working with Tom Milligan, John Cavanagh and the Beat management team over the past several months has reinforced our view that this is a business with excellent leadership, talented underwriters and a clear strategy for the future. We believe that because of market dislocation and pricing momentum, Beat has a unique opportunity to build on an outstanding underwriting track record and expand its managed premium base. We look forward to helping strategically grow the business over time as attractive opportunities arise.”
The transaction to support this partnership is expected to close later in 2020 and the financial terms were not revealed.
Evercore, GC Securities, RPC and Andrew Holderness Consultancy advised Beat Capital on the transaction, while Kirkland & Ellis, PWC, Holman Fenwick and Towers Watson advised Bain.
It’s yet another sign of the attractiveness of insurance and reinsurance linked returns, as well as the significance of market partnerships, with established players, and access to business for large investors, such as Bain Capital.
It also reflects expectations of improving returns from Lloyd’s, as renewal rates in the market harden in-line with global specialty insurance and reinsurance pricing.
By partnering with Beat Capital, Bain gains access to Lloyd’s underwriting returns through a dedicated vehicle. While Beat benefits from a new source of capital to augment the capacity of its underwriting businesses in the Lloyd’s marketplace.
Beat Capital acquired rights with respect to Lloyd’s Syndicate 424 in 2018.