Consortium to pump $750m into new Bermudan venture
Goshawk has brokered an eleventh-hour deal with industry veteran Don Kramer to salvage the infrastructure of Bermuda reinsurer Rosemont Re.
The ex-vice chairman of Ace has put together a consortium of private equity investors who will plough $750m (£423m) into a new Bermuda venture based around Goshawk's staff, technology and franchise.
Rosemont Re will be placed into run-off and administered internally by three ex-Goshawk staff. Russell Brooke and Jon Beck will resign as directors of Goshawk and Rosemont Re, but will move over to the new company.
Brooke said: "This is a rewarding outcome from a very difficult situation."
The new venture will write predominantly short-tail property and marine lines in order to capitalise on hardening markets post-Katrina, according to Brooke.
Under the 'enterprise value deal,' first reported by Insurance Times last week, the investors will pay Rosemont Re an upfront payment of $2.5m (£1.4m) for its existing infrastructure and 8% commission on renewed Rosemont Re business in 2006.
Goshawk said it anticipated this will raise a further $4m to $7m (£2.25m to £4m) for shareholders.
Brooke added: "We are very pleased. Most of the team will move over to the new company and the capital gives us the grounding to really grow the business.
"Most importantly we have secured value for shareholders when it looked as if that might not have been possible."
The transaction remains subject to the new reinsurer obtaining licences from the Bermuda Monetary Authority.