Legacy giant Enstar has confirmed the appointment of investment bank Evercore to sell its two live underwriting businesses.
In a regulatory filing today (18 June), the firm said it had handed Evercore a mandate “to assist in evaluating market interest regarding the potential sale” of StarStone and Lloyd’s managing agent Atrium.
The legacy buyer said it had come to the decision along with private equity house Stone Point Capital, which owns a share of the two businesses through an investment vehicle.
“The company and Stone Point reached the decision to engage Evercore in light of their favorable perception of market conditions, following several other recent transactions in the industry, and will explore whether there is interest in these businesses at attractive pricing levels,” Enstar said in the filing.
Enstar and Stone Point acquired Atrium, which manages Lloyd’s Syndicate 609, in a $158mn deal that closed in November 2013.
Enstar took a 60 percent stake in the business while a Stone Point-managed investment fund took the remaining 40 percent.
The syndicate dodged the worst of last year’s losses to deliver a 99 percent combined ratio that contributed to a £11.7mn profit for 2017.
Just a year after sealing the Atrium deal, Enstar and Stone Point completed an almost $700mn deal to acquire Torus, which was subsequently rebranded to StarStone.
StarStone’s live Lloyd’s platform Syndicate 1301 did not weather the events of last year as well as Atrium, delivering a 134.6 percent combined ratio contributing to a £43mn loss for 2017.
At a group level, improved investment returns offset a 108.5 percent combined ratio to keep Starstone in profit for 2017, as the carrier booked modest net earnings of $2.8mn.
Again, Enstar’s stake in the business is shared with Stone Point, which owns 40 percent while Enstar holds the majority.
Stone Point has increased its stake in Enstar recently after swapping its shares in total return reinsurer KaylaRe to increase its Enstar holding to 7.6 percent giving its portion of voting rights to 9.1 percent.