Catalina raises $700m additional capital from Apollo

Bermuda-based Catalina Holdings has closed a $700 million equity capital raise from Apollo, allowing for “much larger transactions” and making Apollo the majority shareholder.

Catalina acquires and manages non-life insurance and reinsurance companies and portfolios in run-off.

Following completion of the transaction, affiliates of private equity firm Apollo Global Management have become majority shareholders of Catalina, with RenaissanceRe Holdings becoming a minority shareholder alongside Catalina’s management.

As part of the shareholder restructuring, the Apollo Funds have committed an additional $700 million in new equity capital to fund Catalina’s growth. Together with existing committed and undrawn equity, this brings Catalina’s total committed and undrawn equity to $850 million.

The conclusion of the shareholder restructuring follows the announcement in October 2017 that the Apollo Funds had signed a definitive agreement to acquire a majority shareholding in Catalina. Apollo’s acquisition vehicle includes a number of blue-chip, long term institutional and strategic investors.

“We are pleased to announce that the transaction has closed, and delighted to have secured additional equity commitments of $700 million, which together with our existing committed and undrawn equity, prior commitments from Renaissance Re, and our own strong cashflow generation, gives us equity firepower of over $1 billion,” said Catalina CEO Chris Fagan. “When that is combined with our relationship with Apollo’s other entities, it gives Catalina very substantial financial resources to originate much larger transactions than have been done in the non-life legacy sector to date.”

Gernot Lohr, senior partner at Apollo, commented: “We believe the completion of this sizable equity financing, and the Apollo Funds becoming majority shareholders, are a significant milestone for Catalina.

"This transaction consolidates the company’s position as a leader in the non-life run-off industry. We look forward to building upon our strong relationship with Chris and the outstanding team at Catalina, and leveraging Apollo’s deep insurance expertise and our other reinsurance entities to continue to help drive the company’s significant growth.”

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