Elementum Advisors, LLC, an insurance and reinsurance linked asset manager with over $4 billion of assets under management, is selling a 30% stake to insurance and financial services group White Mountains.
Market rumours suggested that Elementum Advisors was part of a sale process of sorts a few weeks ago, but management would not confirm the fact when we queried this at the time.
We’re now told the sales process was fact, as information provided to Artemis states that a 30% stake in the ILS fund and reinsurance linked investment manager has been sold to insurance and reinsurance focused holding company White Mountains.
White Mountains is known for buying stakes in financial services companies, including insurance and reinsurance operations.
Acquiring a stake in catastrophe bond and collateralised reinsurance investor Elementum Advisors is perhaps a predictable and advisable step for White Mountains, given it has owned reinsurance entities in the past, but is also very focused on capital markets access and efficiency of capital.
White Mountains, which is a Bermuda domiciled holding company, has we’re told agreed to acquire as much as a 30% stake in Elementum.
Elementum Advisors, which is a Chicago based ILS fund manager, will benefit from the backing of a larger holding firm, as well as access to risk that White Mountains can perhaps offer, and a monetisation opportunity for partners and any original investors.
Elementum manages a range of funds, from catastrophe bonds across the spectrum of collateralised reinsurance linked assets, with particular focus on alpha generated through origination and expertise in its underwriting teams.
Elementum was one of just a handful of the larger ILS asset managers that was still fully independent, principal owned, so shrinking the pool of independent ILS fund managers just a little further with this agreed deal.
We understand that the acquisition of the stake in Elementum is scheduled to close as soon as May 31st.
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