Enstar Group has launched KaylaRe, a Class 4 reinsurer based in Bermuda, to provide a range of specialty reinsurance to the global insurance market.

KaylaRe launches with initial capital of $620m, backed by a $300m investment from Enstar; $270m from funds managed by Hillhouse Capital Management, Ltd., a leading global investment manager with over $25bn in assets under management (“Hillhouse”); and $50m from funds managed by Stone Point Capital, a financial services-focused private equity firm with aggregate committed capital of approximately $13bn (“Stone Point”).

KaylaRe aims to deliver superior risk-adjusted returns over market cycles through a diversified asset allocation and selective underwriting. KaylaRe has entered into a 35% quota share agreement with StarStone, Enstar’s global underwriting subsidiary, and loss portfolio transfer agreements with Enstar for certain legacy business.

Over time, KaylaRe expects to develop and opportunistically write third-party premium, and to participate in certain future Enstar legacy transactions.

Enstar and Hillhouse will act as the exclusive reinsurance manager and the primary investment manager to KaylaRe, respectively. KaylaRe will also engage other investment managers.

In connection with the launch of KaylaRe, Nick Packer, a co-founder of Enstar, has been appointed Chief Executive Officer of KaylaRe. Packer brings nearly 30 years of industry experience to KaylaRe.

He has served as Enstar’s Executive Vice President and Joint Chief Operating Officer since 2001 and StarStone’s Executive Chairman and Chief Executive Officer since 2014. Packer will remain on the StarStone board as a non-executive director.

Enstar CEO Dominic Silvester said: “KaylaRe brings Enstar together with partners Hillhouse and Stone Point to create a unique global reinsurer. KaylaRe has great performance potential, and a dynamic and proven leader in Nick Packer, who has been a core contributor to Enstar’s growth and success.

“He has shown tremendous commitment to our investment in KaylaRe, and, while he will be greatly missed at Enstar, I look forward to working closely with him in his new role.”

Nick Packer said:  “KaylaRe is a differentiated total return reinsurer, and it is an honour to lead this company from its inception. Through Enstar, we have long-term access to a high-quality, diversified portfolio of low volatility specialty insurance risks and supporting infrastructure.

“Further, the additional investment and support of Hillhouse and Stone Point provide KaylaRe with the capability to create substantial incremental value for shareholders through market cycles.”

With the launch of KaylaRe, Enstar is also today announcing several management changes, effectively immediately:

Paul O’Shea has been named as President of Enstar and Executive Chairman of StarStone. O’Shea, a co-founder of Enstar, has served as Executive Vice President and Joint-Chief Operating Officer and a member of Enstar’s Board of Directors since 2001, and he has been primarily responsible for mergers and acquisitions at the company.

Orla Gregory has been appointed Chief Operating Officer of Enstar. Gregory has served as Chief Integration Officer since 2015. Previously, she served as Executive Vice President, Mergers and Acquisitions, and has held various other senior roles in her 13-year career with Enstar.

Paul Brockman and David Atkins will take on broader responsibility for Enstar’s core insurance and legacy activity, including oversight of claims, commutations, and ceded reinsurance. Brockman, Chief Executive Officer of Enstar US, joined Enstar in 2012 and previously served as US President and Chief Operating Officer and Head of Commutations. Atkins, Chief Executive Officer of Enstar EU and Global Head of Claims, has been with Enstar since 2003.

Demian Smith has been named Group Chief Executive Officer of StarStone. Smith most recently served as CEO of StarStone’s International segment and Chairman of its underwriting committee. Additionally, David Message has been named Chief Underwriting Officer of StarStone.

Silvester said: “I am pleased to announce these appointments today, which signal the robust capabilities, diverse industry experience and collective strength of Enstar’s leadership team. I look forward to working with this talented group as we lead Enstar toward further growth and success.”