MultiStrat Holdings, a Bermuda-based platform that sources casualty reinsurance deals for hedge funds and other alternative investors, has sold a majority stake in the firm to Canopius.
Canopius CEO Michael Watson said the acquisition would be highly complementary to the firm's existing ILS operations based in Bermuda.
MultiStrat CEO Bob Forness said that the transaction would help the platform to scale up its products more rapidly with the insurer's support.
"Casualty ILS capacity works best when paired with traditional capacity, blending the strengths of both to deliver cost effective coverage for reinsureds and attractive returns for investors."
"We’re confident that with active support from Canopius, MultiStrat can broaden its capabilities and grow profitably in the future,” added Watson.
MultiStrat was set up in 2013 at the time when total return reinsurance vehicles were gaining popularity, as a way of offering boutique asset managers access to casualty risks.
It came as other companies were following in the Greenlight Re model, such as Third Point Re, Watford Re, Hamilton (which acquired SAC Re) (https://trading-risk.com/articles/100040/multi-strat-re-appoints-forness-as-ceo
However, the broader total return insurer business model has struggled in recent years and come under ratings agency pressure due to hedge funds underperforming and various individual challenges facing these standalone carriers.
MultiStrat will continue to operate autonomously, and will retain its brand.
Stonybrook Capital served as the exclusive financial advisor to MultiStrat on this transaction.
Earlier this year MultiStrat closed a $205mn casualty ILS deal for asset manager Vida Capital.
Sandell Re, another platform set up by MultiStrat Re in 2014, was acquired by run-off provider R&Q in October 2019. It also ran a reinsurance structure for Till Capital, set up in 2014.
