Ownership shake up at StarStone US as exchange agreement unveiled

Global insurer Enstar has confirmed it will soon own a greater share in StarStone US Holdings as part of an exchange agreement that will also mean the Trident V Funds will own a larger share in the holding company for Atrium Underwriting Group.

The deal deepens Enstar’s ties with Stone Point, and enables the global insurance group to capitalise on the growing number of legacy opportunities, the firms said in a group statement.

The transaction will complete on the condition the previously announced recapitalisation of StarStone US is finished. Following this, a new management team and board of directors will be appointed and new investors will be brought in to increase its total equity capitalisation to more than $850 million, with an Enstar subsidiary reinsuring legacy reserves.

Under the exchange deal, Enstar will acquire all of the Trident V Funds’ interest in the recapitalised StarStone, which will give Enstar approximately 26 percent of StarStone.

The Trident V Funds will receive a portion of Enstar’s indirect interest in Northshore Holdings, which is the holding company for Atrium. This will more than double the fund’s indirect ownership interest in Atrium from around 36 percent to approximately 80 percent. Enstar’s ownership will drop from 54 percent to about 11 percent, with the insurer retaining one Northshore Holdings board seat. Members of Atrium’s management team and funds managed by Dowling Capital will continue to own minority positions in Northshore Holdings.

Enstar, the Trident V Funds and Dowling will retain their respective ownership interests in StarStone’s non-US operations, partnering in the run-off of this business.

The Trident V Funds continue to own approximately 9 percent of Enstar Group’s ordinary voting shares.

Dominic Silvester, Enstar CEO, said: “This transaction deepens our successful relationship with Stone Point, which has been a valued partner of Enstar for two decades. Enstar is ideally placed to capitalise on the increasing flow of large, attractive legacy opportunities, and will remain invested in high-quality live underwriting businesses with proven leadership, such as Atrium and StarStone US, through meaningful minority stakes and alongside trusted equity partners.”

Chuck Davis, Stone Point’s CEO, said: “We are delighted to increase our investment in Atrium. The company is led by an outstanding management team that has a long-term track record of producing underwriting profits. We also value our long-standing relationship with Dominic Silvester and his colleagues at Enstar, and we look forward to continuing our existing partnerships and identifying new opportunities for Enstar and Stone Point.”

Richard Harries, CEO at Atrium, added: “Atrium has thrived under the joint ownership of Enstar and Stone Point. This change, which will have no operational impact on Atrium, is a further vote of confidence in the Atrium team. I am pleased that Enstar will retain an ownership interest in Atrium, and we welcome the increased participation of Stone Point, whose management team we know well, as we pursue our strategic goals in an increasingly improving underwriting environment.”