Fortitude Re and Carlyle launch $700m Asia reinsurance sidecar

Fortitude Re and Carlyle have launched a new reinsurance sidecar, Fortitude Carlyle Asia Reinsurance (FCA Re), backed by more than $700m of deployable capital.

The Bermuda-domiciled Class E reinsurer has been established to support Fortitude Re’s expansion in the Asian life and annuity market, both through existing liabilities and new transactions.

FCA Re will initially assume a share of Fortitude Re’s current Asian business and will also participate in future reinsurance deals across the region.

The vehicle has secured equity commitments from Fortitude Re, Carlyle and a group of global institutional investors, including T&D Insurance Group, AllianceBernstein, Shinhan Life and the National Pension Service of Korea.

Fortitude Re will act as insurance sponsor, while Carlyle will serve as asset management sponsor.

Once fully deployed, FCA Re is expected to add around $10 billion in fee-earning assets under management to Carlyle.

Alon Neches, chief executive officer of Fortitude Re, said the new platform would strengthen the group’s ability to deliver capital-efficient solutions in Asia.

“Fortitude Re has already reinsured approximately $15 billion in reserves on behalf of clients in Asia and we are dedicated to making further investments in the region,” he said.

“FCA Re will help us continue delivering solutions that drive our clients’ strategies forward.”

The partners described Asia as one of the most attractive and fast-growing opportunities in global reinsurance, driven by demographic trends and rising demand for capital management solutions.

Brian Schreiber, partner at Carlyle and head of Carlyle Insurance Solutions, said the venture built on the firm’s long-standing presence in Asia.

“FCA Re is a natural extension of Carlyle’s strategy to deliver integrated asset, capital and liability solutions to insurance clients worldwide,” he said.

“Through FCA Re, we are further demonstrating that the most sophisticated insurance investors globally are choosing to access the Asian market by partnering with one of the world’s most accomplished reinsurers and one of the largest global investment firms.”

“With Carlyle’s more than 25-year history and deep experience in Asia, we are excited to continue to drive growth in the region,” he added.