In the wake of news that Bermudian-based Vantage Risk Ltd is being acquired by Howard Hughes Holdings, AM Best has placed under review with developing implications the financial strength rating of A- (Excellent) and the long-term issuer credit ratings of “a-” (Excellent) of Vantage Risk Ltd (Bermuda) and its affiliates, Vantage Risk Specialty Insurance Company and Vantage Risk Assurance Company (both domiciled in Wilmington, DE), which do business as Vantage Group.

The ratings reflect Vantage Group’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.

A statement from AM Best said: “The under review with developing implications status is driven by the announcement that Howard Hughes Holdings has signed a definitive agreement to acquire Vantage Group from Carlyle and Hellman & Friedman, for approximately $2.1 billion. The transaction is expected to close in the second quarter of 2026, subject to regulatory approval.”

The acquisition will be financed through HHH’s mixture of cash-on-hand and non-interest bearing, non-voting preferred stock issued to Pershing Square Holdings, Ltd.

The preferred shares will be split into 14 equally sized tranches that HHH will have the right to repurchase at the end of each fiscal year for the first seven years post-closing of the transaction.

AM Best added: “It is anticipated that Vantage Group’s operations will remain broadly consistent post-transaction, with the exception of Pershing Square entering into fee-free investment management agreement over the company’s investment portfolio.”

“This will result in higher allocations to public equities post-acquisition, although the higher equity risk will be offset by a higher allocation to cash and short-term Treasuries and a reduction in underwriting leverage via capital contributions.

“AM Best will continue to monitor the situation as the deal progresses and respond if any of the initial assumptions change.”