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Reinsurance: GreyCastle Shows Different Approach For New Capital

Insurance Risk, June 20, 2014 – A recent deal between XL and GreyCastle is made possible by the long-term objectives of the buyer’s backers. Rob Mannix spoke to GreyCastle’s chief executive Raymond Brooks about how this approach is different from that of other similar investments.

A recent deal whereby global insurer XL retroceded part of its life reinsurance business to a Bermudian vehicle represents an interesting twist in the trend for new money to come into the insurance and reinsurance space.

“If you think about private equity or hedge funds, they have natural horizons.” says Brooks. “They are five-year or seven-year funds. We purposefully went with family offices and endowments so our horizons are multigenerational. Since we don’t have a fund or similar vehicles, we have an indefinite – that is, infinite-lockup, which is really compelling to the seller. They know we are going to be around for a long time. This is also important from policyholders’ perspective.”

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