Enstar Group has agreed to acquire an additional 52% interest in KaylaRe Holdings (KaylaRe), the parent company of Bermuda-based, Class 4 reinsurer KaylaRe Ltd.

The acquisition will give Enstar full ownership of KaylaRe. Enstar founded KaylaRe in 2016 alongside funds managed by Hillhouse Capital Management (Hillhouse) and the Trident V funds managed by Stone Point Capital (Stone Point). 

In the transaction, valued at approximately $400m, Hillhouse and Stone Point will exchange their respective 44% and 8% shareholdings in KaylaRe for Enstar shares. Hillhouse will increase its overall economic interest in Enstar from 9.9% to 17.1% and its voting interest from 3.3% to 9.7%.

Stone Point will increase its economic interest from 6.9% to 7.6% and its voting interest from 8.2% to 9.1%. The transaction is subject to regulatory approval and is expected to close during the first quarter of 2018.

KaylaRe aims to deliver superior risk-adjusted returns over market cycles through diversified asset allocation and selective underwriting. The investments managed by Hillhouse have been a key driver of KaylaRe’s profitable performance.

Enstar CEO Dominic Silvester said: “This transaction allows us to take full ownership of an important reinsurance platform. It will also enhance our group capital position and equity base. KaylaRe has exceeded our expectations to date, and as sole owner, we will continue to use it as an integral part of our legacy growth strategy. We look forward to the ongoing support of Hillhouse and Stone Point as key partners and shareholders of Enstar.”

Evercore Group acted as financial advisor to Enstar.