A newly created Carlyle-managed fund, together with T&D Holdings, will acquire a 76.6 percent ownership interest in Fortitude Group from AIG for approximately $1.8 billion.
Fortitude’s group companies operate as Fortitude Re..
The transaction is expected to close in mid-2020, subject to required regulatory approvals and other customary closing conditions. After that, Carlyle and its fund investors will own 71.5 percent of Fortitude Re, including a 19.9 percent acquired in November 2018. T&D will own 25 percent and AIG will hold 3.5 percent.
AIG will receive a $500 million non-pro-rata distribution, which if not paid by the later of May 13, 2020 or transaction close will result in an additional payment from the new Carlyle-managed fund and T&D, based on their Fortitude Re ownership interest.
AIG and Carlyle are attempting to build Fortitude Re into an independent company and position it as a premier provider of retroactive reinsurance and legacy run-off management solutions for long-dated, complex risks, the companies said.
Carlyle will support Fortitude Re’s growth plans by providing it with access to its investment strategies. T&D brings additional industry and international expertise to develop Fortitude Re’s strategically differentiated capabilities.
Kewsong Lee, Carlyle’s co-chief executive officer, said: “Fortitude Re, led by CEO James Bracken, is strongly positioned as an industry leader in managing run-off insurance liabilities.”
Carlyle Group, T&D Holdings, AIG, Fortitude Re