May 1 (Bloomberg) -- Goldman Sachs Group Inc. sold a majority stake in its reinsurance business to institutions and high-net worth clients as financial firms adjust to demands by regulators for more capital.
Goldman Sachs is keeping a minority stake in the business, named Global Atlantic Financial Group, the New York-based bank said today in a statement. The firm didn’t disclose the price of the private offering or what percentage it retained.
Chief Financial Officer Harvey M. Schwartz said in January that the bank might sell part of the business because international regulators are imposing higher capital requirements. The company at that time disclosed the unit’s contribution for the first time, saying revenue climbed 23 percent in 2012 to $1.08 billion.
“We are pleased to have successfully completed the transaction and believe that our new structure and diversified investor base position us well,” Allan Levine, chief executive officer of Global Atlantic, said in a separate statement. “We are pleased that Goldman Sachs will retain a minority stake and, along with our other lead investors, be a key partner in the next phase of our company’s growth.”
Global Atlantic has $1.75 billion of equity and more than 1,000 investors, it said in its statement. The business, which was founded in 2004 within Goldman Sachs, has $15 billion in assets and 200 employees.
The company has a global property and casualty reinsurance business as well as life and annuity reinsurance operations primarily in the U.S. Goldman Sachs agreed in 2012 to buy Ariel Holdings Ltd.’s Bermuda-based insurance and reinsurance businesses to expand property and casualty coverage.
The bank said last month that reinsurance revenue was $233 million in the first quarter, up from $211 million a year earlier.
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