Cohen & Co. raises €375m for insurance debt investments

Fixed income financial services investment specialist Cohen & Company, LLC has raised €375 million for new investment funds focused on provision of subordinated debt to the insurance and reinsurance sector in Europe.

Cohen & Company has been investing in subordinated insurance debt over recent years, as part of its growing practice focused on extracting attractive returns from the insurance and reinsurance market for its investor base.

This latest fund raise saw investment advisory subsidiary Cohen & Company Financial (Europe) Limited raising €375 million into a series of closed-end investment vehicles named the “PriDe III Funds” or “PriDe III”.

PriDe III is the latest series of investment funds advised by CCFEL that have raised capital from third-party investors to allocate to Tier II capital instruments issued by small and mid-size insurers that have limited access to capital markets.

Given the current state of global capital markets and the uncertainty facing insurers, as well as the rising costs of reinsurance capital, Tier II instruments and private subordinated debt in general have become increasingly popular and also useful to insurers.

Cohen & Company said that the PriDe Program can boost insurers’ regulatory capital ratios, fund acquisitions or internal growth, reduce their reinsurance costs and/or lower their weighted average cost of capital.

Daniel Cohen, Chairman of Cohen & Company, commented on the news, “We appreciate our investors’ confidence in Cohen & Company’s long history of expertise in the insurance industry’s regulatory capital environment. This capital raise continues our active engagement with a wide variety of activities within the global Insurance industry.”

Paul Vernhes, Managing Director of Cohen & Company’s European Asset Management platform, also said, “The successful closing of PriDe III is strong evidence of our leading position as a regulatory capital provider to small and mid-size insurance companies in Europe, having achieved our largest fund raise ever in this space, despite the challenging market environment. This closing milestone demonstrates the robustness of insurance subordinated debt, the appeal of our funding solution for potential issuers, as well as investors’ confidence in Cohen & Company’s expertise in the global insurance market.”

Demonstrating the attractiveness of private insurance debt investments, Cohen & Company has already allocated more than $4.3 billion across over 200 insurance companies worldwide.

In Europe, where smaller to mid-sized insurance and reinsurance carriers have typically sought debt capital, Cohen & Company’s investments amount to €1.4 billion across 64 insurance companies located in 18 different countries.