Benfield Buys $30M Stake In Startup Re

NU Online News Service, Dec. 14, 11:31 a.m.EST?Benfield Investment Holdings Ltd. in London said ithas taken a $30 million interest in the Swiss-based startupreinsurance company Glacier Reinsurance AG.[@@]

BIHL, a subsidiary of reinsurance intermediary Benfield GroupLtd., said it purchased shares of the reinsurer's holding company,Glacier Re Holdings in Luxembourg.

Benfield said that, subject to regulatory approval, Glacier Reis due to start writing business on Jan. 1, 2005. It is anticipatedthat Glacier Re will be assigned a financial strength rating uponreceipt of the reinsurance license that will enable it to competein the global reinsurance market, Benfield said.

In addition to BIHL, the consortium of investors in Glacier Reincludes funds advised by HBK Investments LP and Soros FundManagement LLC.

BIHL's investment in Glacier Re has been made in accordance withBenfield's strategy of initiating selective arm's-lengthinvestments in ventures related to the insurance and reinsuranceindustries, which are complementary to its core reinsuranceintermediary business, the company said.

The BIHL investment was made on the recommendation of Benfield'sCorporate Investment Group, which sets independent financial andother business criteria for external business investments made byBenfield.

Benfield said it will not have a representative on Glacier Re'sboard of directors.

"As a reinsurance intermediary, it is a key part of our role toaccess and structure contingent capital for our customers," saidGrahame Chilton, chief executive officer of Benfield. "Where it isappropriate we will work with the capital markets to facilitate thecreation of additional reinsurance capacity to meet our customers'needs.

According to Benfield, its founding investment in Montpelier Rein December 2001 helped bring significant new capacity to themarket at a time of considerable uncertainty.

Benfield said, "As a matter of good practice, we will disclosedetails of our holding in Glacier Re in any transaction where wepropose it as a market to our customers."

Benfield Advisory Inc., Benfield's wholly-owned specialistinvestment banking subsidiary, acted as an advisor to Glacier Re onthe transaction.