Goldman Sachs has partnered with Talcott Financial to set up a new reinsurance vehicle in Bermuda.

West Grove Re, the latest life insurance sidecar to set up on the island will take a share of Talcott’s US annuities reinsurance business, while Goldman Sachs will manage the vehicle’s private-asset investment strategies.

The sidecar has raised $1 billion in capital, which includes equity commitments from Talcott, as well as Goldman Sachs, and some of its wealth management clients, and also a credit facility, according to a statement from the two companies.

Talcott, which is owned by asset management form Sixth Street, said West Grove Re was formed to “support the accelerated growth of Talcott’s insurance and reinsurance platform”.

Imran Siddiqui, chief executive officer of Talcott, said: “Establishing West Grove Re is another important step in Talcott’s growth strategy, broadening our access to liabilities with varied costs of capital, while staying true to the strength of our platform as we continue to scale. Partnering with Goldman Sachs further validates the business we have been building since Sixth Street’s acquisition in 2021.”

Mr Siddiqui separately told Bloomberg News: “We want to be a very well risk-managed insurance business. We don't swing for the fences. We tend to be pretty focused on risk-adjusted returns.”

Vivek Bantwal, global co-head of private credit at Goldman Sachs Alternatives, also told Bloomberg: “This is more strategic than a simple investment management agreement. This is a broader partnership.”

Over the next decade, West Grove Re's annuity portfolio is expected to reach roughly $10 billion, according to a person familiar with the matter, cited but not named by Bloomberg.

The announcement comes after Talcott this week announced a deal with US life insurer Lincoln Financial to reinsure an approximately $5.8 billion run-off block of universal life with secondary guarantee policies, along with approximately $500 million of funding agreement liabilities.

Legal advisers to Talcott were Cleary Gottlieb Steen & Hamilton, Kennedys and Kirkland & Ellis. Goldman Sachs was advised by Goldman Sachs Global Banking and Markets as financial adviser and Debevoise & Plimpton and Appleby Bermuda as legal advisers.