Phoenix hires Julia Henderson, finances non-cat P&C reinsurer Gryphon

Phoenix Merchant Partners, LP, a middle-market focused investment firm, has announced the closing of its debut transaction, that finances a non-catastrophe P&C reinsurance company named Gryphon Holdings, while also announcing the hire of Julia Henderson as Managing Director, Insurance Solutions.

Phoenix Merchant Partners (Phoenix) said that the financing which closed on January 10th marks the official launch of the its private credit and lending solutions platform.

The arrangement provides for the capitalization of Gryphon Holdings’ balance-sheet and finances the future growth of its reinsurance program.

The deal features a combination of a delayed draw senior facility represented by a contingent capital note, and the issuance of preference shares, with terms that will allow Phoenix and related parties to provide additional growth financing over the course of the next several months, the company said.

“We see significant unmet financing needs among unsponsored businesses in the middle market and believe our creativity, prudent approach to structure and focus on process uniquely position us to identify and execute on that differentiated opportunity set,” explained Art Mbanefo, Phoenix Founder, CEO and CIO. “We are excited to launch this part of our platform through our relationship with Gryphon, which provides testament to our ability to pivot and offer bespoke financing solutions that match company and industry dynamics.”

Gryphon Holdings will have a strategy focused on provision of non-catastrophe quota share property and casualty (P&C) reinsurance services.

Houlihan Lokey will act as financial advisor on the next stages of the deal, Phoenix said.

“Art and the team at Phoenix have established well-deserved reputations as creative capital providers at a number of companies and across multiple geographies, this is not the first time we see them bring new innovations to the insurance market,” explained Arik Rashkes, Managing Director and Co-Head of Houlihan Lokey’s Financial Services Group. “We believe that this could be the first of many innovative financings by the Phoenix Merchant Partners platform that can help redefine how companies approach financing alternatives.”

Clifford Chance LLP and Sidley Austin LLP served as legal counsel for Phoenix on the transaction.

It’s notable that Phoenix has also announced the hiring of Julia Henderson, an executive with significant reinsurance and insurance-linked securities (ILS) industry experience.

Henderson is set to join Phoenix as Managing Director, Insurance Solutions, effective February 1st, the company said.

Her most recent position was at Vesttoo, where she worked as Chief Commercial Officer.

Before that, Henderson was President and Head of Portfolio Management at Stable Corporation, a technology company that provides an index-based platform for commodity hedging and utilises collateralized reinsurance techniques to bring in some of its capacity, where she remains on the board of directors.

During her career, Henderson has worked at major reinsurance industry and ILS players including RenaissanceRe, Nephila Capital, PartnerRe, Brit, and Bermuda-based retro ILS specialist Lutece.

Phoenix has also hired Adrian Macedo, who joins the company as Managing Director and Head of Investments, from his most recent role at ORIX USA.

In addition, Benjamin Weston has joined the Phoenix Advisory Board. He recently served as Global Head of Alternative Investments and Chief Investment Officer of the Alternatives Investments Department at Abu Dhabi Investment Authority (ADIA), a wealth fund that has invested in reinsurance and insurance-linked securities (ILS).

“Our people will always be our greatest asset, and the addition of these incredibly talented and highly-regarded professionals provide further testament to the opportunity we see for our platform,” Mbanefo said. “In founding Phoenix, I set out to build a truly institutional business, and we have established an exceptional foundation of insight and experience from which to grow. We look forward to continuing to strategically expand our team and advisory board as we work with high quality companies and investment partners.”

In pursuing non-cat P&C reinsurance quota shares, it seems Gryphon Holdings will operate in segments of the market where Henderson’s previous employer Vesttoo had been active.

It’s not clear at this time whether, as a reinsurer, Gryphon Holdings will follow a traditional balance-sheet backed approach, leverage third-party capital from investors and transact in a collateralized manner, or perhaps a hybrid of the two.