B.P. Marsh commits $5m to new XPT reinsurance venture

B.P. Marsh & Partners Plc, a London-listed investment firm specialising in early-stage and niche financial services businesses, has agreed to invest up to $5 million in Gambit Risk Finance LLC, a newly created reinsurance company tied to its US portfolio business, XPT Group LLC.

Gambit Re is intended to provide limited funding to selected underwriting programmes managed by Platinum Specialty Underwriters, XPT’s underwriting division. The structure is being positioned as a way to give XPT additional funding options, though its scope is narrow and restricted to a small part of Platinum’s portfolio.

Under the arrangement, $1.875 million will be invested immediately, with the rest available later. In return, B.P. Marsh will hold roughly 8% preferred equity in Gambit Re, with an annual preferred return of 8%.

At launch, Gambit Re will support five of Platinum’s programmes, which the companies say have been profitable in the past. The capital base will total $60 million: $45 million from Accord Capital Investments, $10 million from RSP (a vehicle set up by XPT senior management), and $5m from B.P. Marsh.

Accord Capital is a Chicago-based lending and advisory firm. Platinum will manage Gambit Re, while reinsurance administration will be outsourced to Atlantic Security Limited in Bermuda.

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According to B.P. Marsh, the move fits within its insurance sector activity and offers the potential for returns. However, its success will depend heavily on the continued performance of a limited number of existing programmes and the management’s ability to maintain underwriting discipline.

Dan Topping, Chief Investment Officer of B.P. Marsh, said: “This investment is a natural extension of our long-standing partnership with XPT. Gambit Re enables XPT to demonstrate alignment with its carrier partners and expand its Platinum underwriting footprint with greater flexibility.

“The initiative aligns with our approach of backing entrepreneurial management teams with capital solutions tailored to their growth ambitions. We are pleased to continue supporting the XPT team in building a best-in-class specialty platform.”

Tom Ruggieri, CEO of XPT, added: “We’re delighted to have B.P. Marsh’s continued support as we execute this strategic initiative to strengthen XPT’s long-term growth.

“Gambit Re allows us to demonstrate conviction in our Platinum underwriting programs and provide our partners with added confidence through aligned capital. The initiative reflects our commitment to innovation and our focus on building a sustainable, high-performing specialty platform. We value the partnership with B.P. Marsh and are excited to move forward together.”