Ascot partnering with Antares to launch $500m reinsurance sidecar Wayfare Re: WSJ

According to report from the Wall Street Journal, Ascot Group, the specialist global re/insurance underwriter, is partnering with credit focused investor Antares Capital to launch a Bermuda based reinsurance sidecar vehicle named Wayfare Re, that the report suggests will have a casualty focus.

The WSJ reports that the Wayfare Reinsurance sidecar deal will amount to $500 million, and that it will be capitalised by investments from both Ascot and Antares.

The report further states that Antares will act as the exclusive private-credit asset manager for Wayfare Re, managing a portion of the reinsurance vehicles assets through its direct-lending strategy.

Wayfare Re will provide Ascot with additional underwriting capacity, to support its casualty focused operations, the WSJ states.

“As we think about growing our business, one of the areas that we’re looking to grow is what we call our third-party capital business,” Mark Wilcox, Ascot’s chief financial officer is quoted as saying. “We’ve found an attractive opportunity to bring third-party capital to longer-tail casualty lines.”

It’s a little confusing from the WSJ report what exactly Wayfare Re will underwrite, given it states, “Wayfare will provide Ascot with underwriting capacity in support of its casualty offerings in the U.S. and Bermuda reinsurance markets,” but goes on to say, “Wayfare will focus on property risk.”

We suspect a press release announcement may make things clearer in the coming hours, or days.

Antares is said to be investing in the Wayfare Re business off its own balance-sheet, which is $30 billion strong.

It seems this is just the latest expression of reinsurance and asset manager partnerships, to leverage appetites for efficient capital and investment assets, to bring capacity to solve longer-tailed casualty lines expansion.

For Ascot, the Wayfare Re vehicle will augment capacity in a very efficient manner, while for Antares the deal sees it secure assets for its investment strategies, as well presumably as some fee or performance related earnings.

It’s not clear if Ascot is investing its own capital, or capital from its third-party and ILS style business arm, Leadline Capital Partners, into Wayfare Re.

Either way, it’s another sidecar like structure hitting the market at a substantial size, which will increase capacity while adding efficiency and a source of insurance-linked returns to its backers.

If this is indeed casualty and longer-tailed risk focused, it is reminiscent of the third-party capitalised sidecar-like reinsurer that AXIS Capital established, the Monarch Point Re casualty insurance-linked securities (ILS) platform which was launched in collaboration with investor Stone Point.