The latest in funds and investment news from across North America.

Genstar Capital
Genstar Capital, a private equity firm concentrating on financial services, and other sectors, has partnered with insurance industry executives Obsidian Insurance Holdings, a fronting insurance holding company, with $100 million of capital.

Obsidian will source, underwrite, and manage a portfolio of property, casualty, and specialty insurance programs, and reinsure the majority of the business to select reinsurers.

(A “fronting” insurance policy is a risk management technique in which an insurer underwrites a policy to cover a specific risk, but then cedes the risk to a reinsurer. Fronting policies, which are a type of alternative risk transfer, are most commonly used by large organizations. Because the reinsurer takes on the entire policy risk, it consequently maintains complete control over the claims process.)

The new organization will be led by William Jewett, chief executive, who has more than 35 years of industry experience focused on building and managing insurance and reinsurance companies.  His most recent executive position within the industry was with Bermuda-based insurer and reinsurer Endurance Specialty, where he was president and a member of the board of directors.  

Craig Rappaport will join as chief operating officer. He has over 20 years of industry experience focused on building and managing program-focused insurance companies, and most recently served as chief operating officer of specialty property and casualty at the Hanover Insurance Group.  Emily Canelo, who is Obsidian's chief legal counsel, previously served as chief counsel for reinsurance and insurance of Endurance Services.

"Fronting [insurance] companies currently write a small fraction of the premiums of the rapidly evolving property and casualty industry. This will markedly grow, however, as a direct result of the increasing market share and influence of managing general agents and the inherent advantages of the fronting model,” Jewett said in a statement.

Genstar’s track record includes having partnered with Mac Armstrong and Heath Fisher in 2014 to form Palomar, a provider of catastrophe insurance for residential and commercial property, completing an IPO in April 2019. Genstar's other current and former investments in the insurance industry include Alera Group, AMBA, Worldwide Facilities, 2-10 Home Buyers Warranty, Acrisure, Insurity, Financial Horizons, Innovative Aftermarket Systems, and Confie Seguros. Genstar currently has approximately $17 billion of assets under management.

Piper Sandler & Co acted as placement agent and BMS Capital Advisory, In. acted as co-placement agent for the capital raising.