Private Equity Investors Pelican Ventures, J.C. Flowers Complete Ariel Re Deal

November 25, 2020

Private equity investors Pelican Ventures and J.C. Flowers & Co. have completed their acquisition of Ariel Re from Argo Group.

Ariel Re underwrites a global portfolio of reinsurance products in Bermuda, London and Hong Kong through its Lloyd’s platform.

Under the terms of the agreement, which was first announced earlier this month, Argo received $30 million at closing. Pelican Ventures and affiliates will capitalize the 2021 year of account, and Argo will maintain responsibility for all years 2020 and prior.

“Ariel Re has a world class team of people, a well-established book of business, a great platform and we want to expand on that,” said Ryan Mather, Ariel Re’s CEO. (Mather was Ariel Re’s CEO from 2016 to June 2020. He left and become a consultant for Pelican Ventures in August 2020 and has now returned as CEO of Ariel Re).

“Although you may be familiar with the name, this won’t be the same Ariel Re of the past,” said Mather in a statement. “The new Ariel is excited to become a bigger, bolder player in the industry and is eager to work with both old and new clients to help fulfill our vision of making Ariel Re the premier manager of reinsurance risk.”

“This is an important milestone for Argo Group as we simplify our operations – primarily as a U.S.-focused specialty insurer,” said Argo’s Chief Executive Officer Kevin J. Rehnberg. (Argo purchased Ariel Re in February 2017.)

Argo Group recently has taken a series of steps to restructure its business after some poor results and a leadership change. In a September 2020 presentation for investors, the company indicated units with $500 million or more in premiums are under review.

Pelican Ventures and J.C. Flowers also announced they finalized an operational partnership with Apollo Syndicate Management Ltd. to develop SPA 6133, a Lloyd’s special purpose arrangement (SPA), focused on property catastrophe reinsurance.

Mather explained that pairing Ariel Re with SPA 6133 is expected to generate greater scale and enable Ariel to create more meaningful relationships with its clients going forward.

Pelican Ventures, an investment firm with a sole focus on the insurance industry, includes RenaissanceRe founder and former TigerRisk Partners Chairman and Co-Founder Jim Stanard, as well as catastrophe modeling pioneer Jayant Khadilkar.

Stanard will become Ariel’s non-executive chairman while Khadilkar will act as a special adviser, focusing on modeling, analytics and technology.

“The Ariel Re team, under the leadership of Ryan Mather, will implement our strategy for building a world-class manager of reinsurance risk,” said Stanard. “Together, Ariel Re and SPA 6133 will bring significant fresh capital into the marketplace and enable us to act quickly.”

Eric Rahe, managing director of J.C. Flowers, added: “We look forward to partnering with the Ariel Re team, building on their outstanding track record and taking advantage of the exciting opportunities in the P&C market today.”

TigerRisk Capital Markets & Advisory acted as exclusive financial advisor to Pelican Ventures and J.C. Flowers in the transaction. DLA Piper served as legal adviser.

About Ariel Re

Originally founded in 2005, Ariel Re has been part of Argo Group International Holdings Ltd. since 2017. Ariel Re transacts reinsurance business through offices in Bermuda, London and Hong Kong. Ariel Re operates principally through Syndicate 1910 at Lloyd’s but also offers access to Lloyd’s Brussels (LBS) via LBS Syndicate 5336.

About SPA 6133

SPA 6133 is a catastrophe-focused SPA which reinsures property treaty business written by Apollo Syndicate 1969 and is managed by Apollo Syndicate Management Ltd. It launched in 2018 with a stamp capacity of £35 million and has grown to a stamp capacity of £65 million in 2021.

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