US investment banking and securities firm Goldman Sachs Group has disposed of its 75% stake in the Bermuda-based insurance and reinsurance company Ariel Re, for an undisclosed sum.
Sources familiar with the matter were quoted by the Financial Times as saying that the lender offloaded the stake in a private placement rather that selling it directly to a hedge fund or private equity firm.
Acquired in April 2012, Ariel Re was managed as part of Goldman Sachs Reinsurance Group (GSRG) and integrated it with existing business underwritten through Lloyd’s Syndicate 1910.
As part of Goldman’s strategy to lessen its reliance on traditional investment banking and trading, the acquisition of the Bermudian company also helps in gaining a strong foothold in reinsurance business rapidly.
The lender has decided to hold the remaining 25% non-controlling stake in the insurance and reinsurance company, which will enable it to thwart capital increase regulation for the reinsurer.
The news paper reported citing one source familiar with the development that Goldman will remain offering reinsurance services to hedging and investment.
Goldman’s reinsurance business registered revenues of $1.08bn last year, according to the financial result of the company.
Established in 1869, Goldman Sachs Group is headquartered in New York and manages offices in London, Frankfurt, Tokyo, Hong Kong and other major financial centers globally.