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Apollo buys controlling interest in Catalina

Keeping role: Catalina chairman and CEO Chris Fagan

Private-equity firm Apollo Global Management is to increase its interests in the Bermuda insurance market by buying a majority stake in run-off specialist Catalina Holdings (Bermuda) Ltd.

Apollo made an initial investment in Catalina in December 2013 and, as a result of the deal announced today, the New York-based firm and affiliated investors will have a controlling interest in the business.

Apollo is also a major shareholder of island-based Athene Holdings Ltd, a life reinsurer that went public with an initial public offering last December.

Catalina has doubled in size over the past three years, since Apollo became involved with the company.

The group has completed 23 deals, acquiring $4.7 billion of non-life insurance and reinsurance liabilities and, as at June 30 of this year, had total assets of $3.6 billion and shareholders’ equity of $700 million.

Catalina’s headquarters are in Cumberland House, on Victoria Street, Hamilton and the firm also has offices in the US, Ireland and Switzerland.

The company specialises in buying up companies or insurance portfolios that have ceased writing new business and managing their exiting assets and continuing liabilities.

In a statement released today, Catalina said the existing management team, led by founders Chris Fagan and Dean Dwonczyk, will continue to run the business and maintain a significant shareholding.

Mr Fagan, Catalina’s chairman and chief executive, said: “We’re delighted that Apollo, and the long-term institutional shareholders supporting it, are increasing their shareholding in Catalina.

“They are doing so at a time of significant change in the non-life insurance legacy sector which is developing faster now than at any point over the last 15 years.

“Catalina is one of the leading consolidators in the non-life run-off sector and together with our new shareholders, we believe the company is ideally positioned to continue our strong growth and development.

“I would like to thank our exiting investors Caisse de depot et placement du Quebec and Ontario Teachers’ Pension Plan for their consistent support over the last ten years and the role they have played in helping us to build Catalina.”

Gernot Lohr, Senior Partner at Apollo Global Management added: “We fully support the outstanding management team at Catalina and are excited about the opportunity to deepen our relationship with the business.

“Whilst already significant, the market for non-life legacy acquisitions continues to grow, and we believe Catalina is well positioned to capitalise on these opportunities due to its deep industry expertise as evidenced by its successful track record.

“We look forward to working with Catalina during the next phase of its growth and development.”

Catalina was advised by Barclays, JP Morgan and Allen & Overy. Apollo was advised by Sidley Austin.