Cohen & Co. Targets Reinsurance & Insurtech Acquisitions

Cohen & Company, LLC, a fixed income financial services specialist with over $3 billion under management, is seeking to raise capital for what is termed a blank check company that will target acquisitions in the insurance, reinsurance and insurtech space under the leadership of John Butler.

Source: Reinsurance News - Steve Evans | Published on February 20, 2019

Human resources concept on tablet with hologram

Cohen & Company hired John Butler as Managing Director of its U.S. Insurance Asset Management Platform in 2017, gaining significant experience and an understanding of the challenges traditional re/insurers faced with the hire.

Now the firm is seemingly putting that experience to good work, with the launch of a capital raise for Insurance Acquisition Corporation, which is seeking to raise up to $150 million for acquisitions in the space.

Butler is set to be the President and Chief Executive Officer of Insurance Acquisition Corp, while Paul Vernhes of Cohen & Co. will be Chief Financial Officer, and Daniel G. Cohen, founder of Cohen & Co. will be Chairman of the Board of Directors of the new firm.

As a so-called blank check company, Insurance Acquisition Corp. will be capitalised and formed before it makes any acquisitions, but soon after will be expected to put its raised funds to good use in a targeted exercise to create a business out of insurance, reinsurance and insurance technology (insurtech) related acquisitions.

While the company will aim to acquire a regulated insurance or reinsurance firm, it said that it is not limited to that scope and could buy businesses linked to the sector instead.

“We believe a focus on the insurance sector best combines the expertise and experience of our management team with a sector that offers attractive investment opportunities,” the companies filing explains.

Insurance Acquisition Corp. is expected to seek to capitalise on the expertise and contacts of its management team to complete its initial combination.

The offering will see 13 million securities (stock) offered to investors at $10 each, and the company will be listed on the Nasdaq Capital Market. Cantor Fitzgerald is running the offering for Cohen & Company. In addition, market makers and backers could take the whole capital raise to almost $150 million, including an investment expected to be made by Cantor Fitzgerald who is running the book.

Given Butler’s experience in reinsurance and insurance-linked securities (ILS), as well as Cohen’s expertise in raising capital for fintech investment acquisition funds, it will be interesting to see how any capital raised is put to use.