Aleph Capital Partners and Crestview Partners have agreed to provide a €260m equity funding commitment to international insurance and reinsurance company Deutsche Versicherungs- und Rückversicherungs (Darag).
Headquartered in Malta, Darag is specialized in taking inactive or discontinued (run-off) businesses from direct insurers and reinsurers.
The company has completed 23 run-off transactions in 15 countries with a value of more than €740m since 2009.
Darag recently strengthened its management team with the appointments of Stuart Davies as executive chairman in 2017 and Tom Booth as CEO in July 2018.
Under their leadership, the company will use the additional capital to undertake and fulfil its global ambitions in the expanding and maturing global property and casualty (P&C) insurance run-off market.
Darag chairman Stuart Davies said: “We have a very clear path to become a leading global legacy insurance business. We have already come a long way in Europe, where we are a market leader, and will now be bringing our expertise to the US and beyond, where we see substantial demand for skilled legacy acquirers such as Darag.
“Aleph and Crestview’s significant investment will support our ambitious expansion targets and their strong track-record in the insurance sector makes them an excellent partner.”
Aleph founder and CEO Hugues Lepic said: “Darag is on an exciting trajectory in the rapidly expanding and increasingly important legacy segment of the P&C insurance industry.
“In the coming years we see significant opportunities to drive growth globally and we are very excited to be partnering with Keyhaven and Darag’s management team to support the company in this next important phase of its development.”
Crestview Partners stated that Darag has a significant growth potential and it is well positioned to benefit from the positive market dynamics for run-off acquirers.
In May this year, Darag announced its first transaction with New Nordic Advisors.
The transaction sees Darag and New Nordic buy two portfolios of Qudos Insurance, the control of which New Nordic acquired in 2017 through a joint cell structure.