Convex takes committed capital to $2.7bn+ with new raise

Convex Group, the specialty insurance and reinsurance company founded by Stephen Catlin, has added another $1 billion dollar of capital from private equity investors, taking its total committed capital base to more than $2.7 billion.

Convex launched back in April 2019 with $1.7 billion of initial committed capital.

Now, the same investor group including Canadian pension PSP Investments and private equity partner Onex have helped the re/insurer lift itself to over $2.7 billion, giving the company ample firepower to grow its footprint and market share across the insurance and reinsurance business lines it operates in.

Convex has raised its capital from its own management team, Onex Partners V, Onex Corporation’s (TSX: ONEX) large-cap private equity fund, and a consortium of co-investors. This additional capital has been raised by the same investor group as well as additional new Onex co-investors including Singapore sovereign wealth investor GIC.

Stephen Catlin commented, “Onex and our existing investor base has provided us with tremendous support in building the business and we welcome our new investor partners. We are delighted to have additional capital as this will enable us to take full advantage of the hardening market.”

Paul Brand added, “In 18 months, Convex has become a 300 people strong insurer and reinsurer with a significant presence in Bermuda and London. We launched Convex with a singular vision, to create a world class company for the 2020’s which was legacy free, technologically proficient and well-endowed with capital to provide a safe haven for our customers. We are well on the way to achieving that vision.”

Bobby Le Blanc, President of Onex and Head of Onex Partners, commented, “Over the past eighteen months, the Convex management team has made significant progress in realizing our original investment thesis, having successfully executed on its recruiting plan, implemented key operational systems and processes, established strong relationships with brokers, and written over $1 billion in premiums. This momentum, coupled with the favorable P&C insurance market conditions, have further improved the risk-adjusted return opportunity and make us confident in the continued success of the business.”

Choo Yong Cheen, Chief Investment Officer of Private Equity at GIC, added, “GIC is pleased to partner with Stephen, Paul, and the rest of the Convex team given their tremendous success to date and long track record of disciplined underwriting. We believe that Convex’ unique value proposition within complex risk is well-suited for the current market environment. As a long-term investor, we look forward to working alongside Onex and other shareholders to support the Company as it embarks on its next phase of growth.”

Martin Longchamps, Managing Director, Private Equity at PSP Investments, said, “We are pleased to continue our successful partnership with Onex and Convex by supporting the Company’s accelerated growth strategy. The Convex management team has established an agile, world-class specialty insurer with a strong operational foundation. This transaction is in line with our strategy of making sizeable, direct investments in high-quality companies alongside experienced partners.”

Convex has also recently been adding capital in another form through its first Hypatia Re catastrophe bond transaction, which have brought the capital markets firmly into its reinsurance program to the tune of $300m.