Helios builds capacity for 2024 to £501m thanks to sidecar arrangement

Helios Underwriting PLC (Helios), the AIM listed Lloyd’s focused insurance and reinsurance investment company, has increased its forecast for capacity for 2024 to £501 million, helped by its recently announced third-party capital arrangement which its CEO terms a sidecar for the company.

Recently, Helios was revealed to have entered an arrangement with Argenta Private Capital, an FCA regulated adviser to investors in the Lloyd’s insurance and reinsurance market, that would see Argenta clients able to participate in the returns of a portfolio of syndicates at Lloyd’s that have been curated by Helios’ CEO Martin Reith.

Now, the company has given more visibility of what that can mean to Helios, with the Argenta arrangement set to contribute more than 10% of its capacity for 2024.

Helios called it a “ground-breaking sidecar initiative to “rent” up to £55m of capacity to private capital in conjunction with Argenta Private Capital Limited.”

It helps to increase third-party capacity by 73% to £114.9 million for 2024, while Helios’ retained capacity grows 58% to £386.9 million.

Driving capacity growth to 61% overall, for the 2024 year of account.

Martin Reith, CEO of Helios, explained, “I am delighted to report that we have substantially grown our portfolio into 2024 and further positioned Helios to benefit from market discipline and the attractive pricing environment. We have built the portfolio to deliver superior returns across a diversified and volatility managed portfolio. As a consequence we expect to have in excess of £500m capacity deployed for the ‘24 YoA.

“We have also started to shift the quality of our earnings away from pure underwriting returns and into a hybrid model where we have repeatable fee income generated by allowing access to our portfolio. Our “rental capacity” initiative with private capital is ground-breaking and allows investors a fast and efficient way to participate at the heart of some of the best syndicates trading at Lloyd’s and removes the requirement to buy and own freehold capacity to access a Lloyd’s portfolio.

“While deploying our own funds to the maximum, we have also added to the capital stack that supports the portfolio with proportional and non-proportional reinsurer support, sidecar capacity and rated debt. We are well positioned to secure further growth if we can originate other opportunities.

“I am thrilled that we have been able to significantly build the portfolio and to reinforce our value proposition as a key part of private capital at Lloyd’s.”