White Mountains Insurance Group, Ltd. has finally confirmed that it has acquired a minority stake in Elementum Advisors, LLC, an insurance and reinsurance linked asset manager with over $4 billion of assets under management.
We first revealed this news back in April, when we explained that Elementum Advisors, LLC was set to sell a 30% stake to insurance and financial services group White Mountains.
At the time we explained that this was expected to be a 30% holding in the ILS manager. White Mountains has announced the acquisition of this stake today, but has not confirmed the terms or size of the stake.
Elementum Advisors has been a leading manager of insurance-linked securities (ILS), catastrophe bonds and collateralized reinsurance since its launch back in 2009, reaching more than $4 billion of ILS assets under management this year.
Commenting on the announcement, Elementum Founding Principals Tony Rettino and John DeCaro said, “We are thrilled by White Mountains’ investment in Elementum. We believe it will enable us to continue to provide high quality investment management services to our investors and fortify our business operations and franchise.”
Manning Rountree, Chief Executive Officer of White Mountains, added, “We are delighted to make this investment in Elementum. Tony and John have built a quality business with a strong track record. We look forward to their continued success.”
White Mountains said that as well as acquiring a stake in the management company it is also set to invest $50 million across the Elementum Advisors ILS and reinsurance linked funds.
The business remains under the control of the Elementum principal’s, who continue to own a significant majority of the ILS fund manager and will maintain control of business operations following this transaction.
TigerRisk Capital Markets & Advisory acted as the financial advisor to Elementum on this transaction, while Kirkland & Ellis LLP gave the ILS manager legal advice and Cravath, Swaine & Moore LLP provided legal advice to White Mountains.
The White Mountains insurance group can without a doubt help to enhance Elementum’s access to risk and likely also bring the ILS manager to the attention of more investors as well.
As well as its insurance and reinsurance interests, White Mountains also has asset management and capital market interests as well, making a stake in one of the largest and most respected independent ILS fund managers an ideal fit for the company.
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