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3i and Khazanah lead investment in ACR’s $620m inaugural private placement

1 Dec 2006

3i and Khazanah Nasional Berhad have backed a US$620m capital raising by Asia Capital Holding. Asia Capital Reinsurance Group, ACR's wholly owned subsidiary, has been granted registration as a reinsurer by the Monetary Authority of Singapore.

This transaction creates a pan-Asia focused independent reinsurer that has been formed to address the demands of the Asian property and casualty insurance industry. Based in Singapore, ACR will focus on specialty lines of reinsurance in the large risks segment such as aviation, marine, energy, large infrastructure and engineering projects across Asia.

The lead investors in ACR are 3i and Khazanah, the investment arm of the Government of Malaysia, which have each committed US$200m to ACR. In this field, 3i has previously invested in Aspen Re.

Khazanah said it will provide both a strong Asian network and access to the Malaysian market. To capitalise on the market in Malaysia, Khazanah and ACR will jointly form a local reinsurance JV in which Khazanah will hold 70 per cent.

The remaining equity investment comes from a blue chip syndicate of global investors including affiliated investment funds of Och-Ziff Capital Management Group, Morgan Stanley Private Equity Asia, Credit Suisse Private Equity Asia and the Luxembourg-based ‘Worldwide Sicav’.

ACR was also able to attract a number of angel investors including Koh Boon Hwee, Lim Ho Kee and Hsieh Fu Hua who will remain as minority shareholders.

ACR’s founder and CEO, John Tan, has spent 30 years in the insurance and reinsurance industry, mainly in Asia. The Co-founder and COO is Heini Buergi.

Tan said, ‘We are very excited by the creation of ACR. I am personally grateful to all our investors, business partners, friends and fellow colleagues for their commitment and steadfast support to help ensure that ACR has the opportunity to play an effective role in the insurance and reinsurance market. It is most fortunate that ACR is able to operate at a time when many people, within and outside the industry in Asia, are calling for the faster development of the Asian reinsurance landscape to cope with the significant growth in quality assets and insurance needs. We are also happy to note that ACR has attracted global expertise to kick start our operations and will increasingly strengthen our team with Asian talent’

Mark Thornton, 3i managing director Singapore and co-head Asia, added, ‘The ACR private placement is a landmark transaction in the region. We are impressed with ACR’s founders’ entrepreneurial spirit and leadership and the management team’s unparalleled track record. We share their vision to establish ACR as a player in the pan-Asia reinsurance market and look forward to actively working with the team to achieve this goal.’

Recent investments by 3i include Little Sheep, China, €20m; Vijai Electricals, India, €20m; Boxer, Sweden, €84m; Clinica Baviera, Spain, €40m and Vetoquinol, France, €20m. Recent realisations include CH4 Energy, UK, €225m; Williams Lea, UK, €160m; Gant, Sweden, €241m; Cannon Avent, UK, €450m and AC Hotels, Spain, €45m.

Set up in 1993, Khazanah is the investment holding arm of the government of Malaysia entrusted to manage the assets held by the government and to undertake strategic investments.

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