Humboldt Re acquired by run-off specialist Marco Capital

Humboldt Re Ltd., one of the two Guernsey based, Credit Suisse Insurance-Linked Strategies supported rated reinsurance carriers, has now been sold to European property and casualty (P&C) run-off specialist company Marco Capital Holdings Limited.

As we explained back in August, the signing of a sale agreement had been revealed, which would allow the main shareholder of Humboldt Re, which we assume was certain funds under the management of the Credit Suisse ILS team, or an entity related to the wider Credit Suisse group, to recognise the value locked up in the rated reinsurance company and its portfolio.

Then as we explained last week, it was revealed that the expected buyer of Humboldt Re would be a run-off or legacy specialist.

Now, Marco Capital has announced the acquisition of Guernsey based reinsurance company Humboldt Re Limited, having received regulatory approval from the Guernsey Financial Services Commission and with the deal now completed.

Simon Minshall, CEO of Marco, commented, “I am delighted to announce the acquisition of Humboldt Re. Clients engage in run-off transactions for a variety of reasons – providing customized strategic solutions is a fundamental service Marco offers and is a core pillar in Marco’s strategy. This transaction demonstrates our structuring capabilities and key proposition in offering the best solution for our clients.”

This sale will allow remaining capital to be unlocked and flow to the benefit of any investors backing the funds or positions that underpinned Humboldt Re.

Humboldt Re and another Credit Suisse ILS linked reinsurance company Kelvin Re, were both being closed down due to strategic decisions taken by the ultimate institutional investors behind them.

Humboldt Re and Kelvin Re both took their financial support from insurance-linked securities (ILS) investors and funds under the management of Credit Suisse Asset Management’s specialist ILS investment unit.

Humboldt Re was backed by capital from some of the insurance-linked securities (ILS) funds managed by Credit Suisse Asset Management (CSAM), while Kelvin Re was solely backed by investments made by the Abu Dhabi Investment Council, a sovereign wealth investor.

As we also reported this year, the Pension Fund of Credit Suisse Group said it had undertaken a CHF 357.1 million restructuring of insurance-linked securities (ILS) investments and revealed an exposure to the running-off of the rated reinsurance company Humboldt Re.

So it’s anticipated that this specific pension fund may be one of the beneficiaries of this sale of the rated reinsurer to run-off specialist Marco Capital.

This sale of Humboldt Re as an entire entity will unlock trapped value for investors with exposure to the reinsurer, while also allowing this chapter to be finalised for Credit Suisse.

This is Marco’s third transaction in the space of nine months and the company said the acquisition of Humboldt Re will significantly increase its balance-sheet size.