The largest U.S. based privately owned reinsurance brokerage, Holborn Corporation, has taken a stake in an investment banking firm which specialises in advising the insurance and reinsurance sectors. Holborn has made an equity investment in Stonybrook Capital LLC, gaining its first presence in the growing investment banking sector of reinsurance.
All the large, global reinsurance brokers (Aon, Willis, Guy Carpenter, Towers Watson) have their own investment banking capabilities These capital market focused units are typically involved in financing, mergers and acquisitions, restructuring and also, of course, capital market backed transactions such as insurance-linked securities, catastrophe bonds and the establishment of vehicles to manage capital such as sidecars.
By acquiring a stake in a firm which is already working in the insurance and reinsurance space, Holborn has effectively positioned itself as capable of undertaking these types of investment banking and transactional support services for its clients. As the reinsurance and capital markets convergence continues it is becoming increasingly important that brokers are able to service clients needs when they are targeting third-party or ILS capital. Holborn now has the facilities at its disposal to support this.
“We’re pleased to take an equity position in Stonybrook. This investment gives Holborn a presence in the investment banking sector and will create mutual opportunities for business development to benefit our respective clients,” commented Frank T. Harrison, Chairman, President and CEO of Holborn.
For Stonybrook Capital, having a partner like Holborn will be invaluable and should open up opportunities within reinsurance transactions as well as the restructuring and M&A side of the business.
“Our relationship with Holborn provides a new dimension of service for Stonybrook clients who will have access to Holborn’s global network of reinsurance markets, analytics and industry expertise,” added Joseph Scheerer, Principal and Managing Director of Stonybrook Capital.
Frank T. Harrison continued; “Partnering with Stonybrook, we will help our clients benefit from merger, acquisition, and restructuring opportunities, and extend our advice to the debt and equity side of the equation. It gives us the means to deliver an even more comprehensive perspective to clients regarding their business strategies.”
As alternative capital plays a growing role in the reinsurance market we expect brokers to position themselves to be able to accommodate clients requests for support in how best to leverage and make use of investor capital within their underwriting. With this investment in Stonybrook Capital, Holborn is now positioned to assist its clients both in transactional support for ILS and capital markets risk transfer deals as well as in issues of managing third-party capital for re/insurance underwriting.