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Ariel Re to be sold to Brazilian bank — no job losses

Bermuda-based reinsurer Ariel Holdings Ltd has agreed to be sold to Brazil's Grupo BTG Pactual SA, largest independent investment bank in Latin America, for an undisclosed sum.

Ariel's CEO Tom Hulst told The Royal Gazette last night that “no jobs will be lost” as a result of the planned sale.

The ‘Class of 2005' reinsurer employs 63 people on the Island at its headquarters on the fifth floor of the Victoria Place office building.

Apart from its Bermuda reinsurance operation, Ariel Reinsurance Company Ltd, Ariel owns Atrium Underwriters Ltd, through which it operates in the Lloyds of London market.

Mr Hulst added: “We anticipate that the management and structure of the organisation will remain the same.”

The transaction, which includes all of Ariel Re's operating entities, assets and debt, remains subject to regulatory approval in Bermuda and Brazil, as well as the UK, BTG Pactual said in a statement yesterday.

According to the statement, Ariel Re will become the “cornerstone of BTG Pactual's international reinsurance venture, which builds on the success of its London-based reinsurance principal investment business” as it bolsters its presence in the sector.

Under the deal, Ariel Re will keep running its Lloyd's of London syndicate and have access to its security ratings.

Ariel Re was founded by reinsurance veteran Don Kramer in the wake of Hurricane Katrina in 2005 with about $1 billion in capital.

It is currently fully owned by Global Atlantic Financial Group Ltd, a multi-line insurance and reinsurance company with more than $30 billion in assets that was founded by Goldman Sachs Group Inc in 2003. It became an independent entity last year.

According to a report by Reuters, the move underscores BTG Pactual's efforts to broaden potential revenue and business opportunities sources as financial markets in Brazil, the bank's home turf, struggle after three years of subpar growth. BTG Pactual is expanding into commodities sales and trading and other areas such as insurance to take advantage of tougher capital and risk management rules in the Unites States and Europe.

“While current market conditions are clearly challenging, the opportunity to buy a best-in-class business with proven risk-discipline was too good to miss, as it offers an exceptional opportunity to expand our presence in the property and casualty industry outside of our local market,” chief executive officer André Esteves, who is also BTG Pactual's largest shareholder, was quoted in the statement as saying.

Ariel Re CEO Tom Hulst

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Published July 11, 2014 at 9:00 am (Updated July 10, 2014 at 10:33 pm)

Ariel Re to be sold to Brazilian bank — no job losses

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