A new reinsurance sidecar structure has been launched to support business underwritten by Fortitude Re, as another major player looks to efficient sidecar capital vehicles to support and enhance its business.Fortitude Re has worked with its key backers, global investment firm Carlyle and T&D Holdings, the parent to Japanese insurance group T&D, to launch this new reinsurance sidecar vehicle.Fortitude Carlyle Asia Reinsurance Ltd.is expected to provide third-party capitalised reinsurance to some of the insurance business that had originally been reinsured by Fortitude Re.

It’s not clear exactly what type of re/insurance business will feature in the sidecar structure, given Fortitude Re has a large portfolio of life, annuity, casualty and other longer-tailed exposures.Given the name of the sidecar vehicle itself, having Asia in it, it seems possible this is a sidecar structure focused on Asian risk.There have been a number of companion and third-party capital vehicles focused on the Asian life and annuity space in the past.

In addition, Fortitude Re has transacted some large life and annuity reinsurance arrangements with a Japanese focus, although we cannot be certain at this time whether that is the underlying for this Fortitude Re sidecar.That business will be retroceded to the sidecar structure by a subsidiary of FGH Parent LP (Fortitude), the reinsurance holding company domiciled in Bermuda.To assist in funding the reinsurance sidecar, T&D United Capital Co., Ltd., a subsidiary of T&D, will invest in a limited partnership named Carlyle FCA Re, L.P., which is set to be operated by Carlyle.

Carlyle FCA Re is the parent to recently established Bermuda-based reinsurance company Fortitude Carlyle Asia Reinsurance Ltd., which is the sidecar vehicle itself.T&D has committed up to US $250 million to the L.P.structure to help fund the Fortitude Carlyle Asia reinsurance sidecar.

Both Fortitude and Carlyle have also made what are termed significant investments into the structure funding the reinsurance sidecar as well.Fortitude Re was originally formed as original parent AIG span off the legacy and life focused reinsurance entity in partnership with Carlyle.AIG has since sold down its stake and Fortitude Re has continued its business, building a significant portfolio and underwriting with a liability-driven investment and hedging philosophy.

This sidecar launch is another example of a major reinsurer and investment firm looking to how capital can be most efficiently managed and finding the sidecar a good way to help fund risks, bring in new capital and provide a mechanism to support continued efficient growth.Find details of numerous reinsurance sidecar investments and transactions in our directory of ..All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance can be accessed online.

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