Apollo funds commit US$700m in equity capital to Catalina

[NEW YORK] Apollo Global Management LLC funds agreed to commit an extra US$700 million to Catalina Holdings Bermuda Ltd, an insurer that acquires old property-casualty policies that it seeks to wind down.

That equity capital comes as the funds closed on a previously announced agreement to become majority shareholders of the company, Bermuda-based Catalina said Thursday in a statement. RenaissanceRe Holdings Ltd is now a minority shareholder, along with Catalina's management.

The transaction gives Catalina Chief Executive Officer Chris Fagan and his team more money to pursue deals. The company has snapped up German legacy medical malpractice liabilities from Zurich Insurance Group AG and pursued a deal with Arch Reinsurance Ltd.

The additional capital, along with existing equity and cash flow, "gives us equity firepower of over $1 billion," Mr Fagan said in the statement. Catalina has "very substantial financial resources to originate much larger transactions than have been done in the non-life legacy sector to date."

Funds tied to Apollo invested in Catalina in 2013 and agreed last year to buy a majority stake. The private-equity firm has also helped build annuity seller Athene Holding Ltd. and agreed in August to buy Aspen Insurance Holdings Ltd.

BLOOMBERG