FG Financial Group Announces Formation Of Reinsurance Sidecar To Support Growth of Reinsurance Business

Rhea-AI Summary

FG Financial Group, Inc. (Nasdaq: FGF) announced the formation of a reinsurance sidecar, FG Re Investors I LLC, via its subsidiary FG Reinsurance Ltd, aiming to enhance its reinsurance portfolio. This initiative will attract third-party investor capital and is supported by Castle Placement, LLC as the exclusive placement agent. CEO Larry Swets highlighted the strong reinsurance market, while Chairman Kyle Cerminara noted the potential for new revenue streams via fee income from the existing platform.

Positive

• Formation of FG Re Investors I LLC to enhance reinsurance capacity.
• Strong reinsurance market presents growth opportunities.
• Potential for new revenue streams from existing platform.

Negative

• None.

ST. PETERSBURG, Fla.--(BUSINESS WIRE)-- FG Financial Group, Inc. (Nasdaq: FGF) (the “Company”), today announced that the Company’s reinsurance subsidiary, FG Reinsurance Ltd (“FGRe”) has formed a reinsurance sidecar, FG Re Investors I LLC, to provide collateralized capacity to support their growing reinsurance portfolio. FG Financial is a reinsurance and asset management holding company focused on collateralized and loss capped reinsurance and merchant banking that allocates capital in partnership with Fundamental Global^®, a private partnership led by Kyle Cerminara and Joe Moglia, as well as other strategic investors.

The new reinsurance sidecar intends to raise third-party investor capital to fund its business activities. Castle Placement, LLC has been engaged by FG Re Investors I LLC as the exclusive placement agent for the capital raise.

FG Financial Group CEO Larry Swets commented, “The reinsurance market is the strongest we have seen in many decades, presenting compelling opportunities to write attractive contracts. Since launching our reinsurance business we have grown the number of insurers and reinsurers that we support and remain focused on continuing to drive profitable growth. The creation of a reinsurance sidecar provides us with another means of leveraging our underwriting capabilities to execute our strategy of deploying capital in compelling, and frequently unique asymmetrical risk reward opportunities.”

FG Financial Group Chairman and Fundamental Global CEO Kyle Cerminara commented, “This structure enables us to source a new revenue stream from the fee income that we will earn utilizing our existing reinsurance platform. We remain focused on patiently allocating capital to drive long-term shareholder value.”

FG Financial Group, Inc.

FG Financial Group, Inc. is a reinsurance and asset management holding company focused on collateralized and loss capped reinsurance and merchant banking that allocates capital in partnership with Fundamental Global^®, a private partnership led by Kyle Cerminara and Joe Moglia, as well as other strategic investors. The Company’s principal business operations are conducted through its subsidiaries and affiliates.

Castle Placement, LLC

Castle Placement (member of FINRA/SIPC) is a broker-dealer founded in 2009. Castle Placement raises private equity and debt capital for its clients utilizing experienced investment bankers fully integrated with its robust, data driven, technology platform.

Forward Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements are therefore entitled to the protection of the safe harbor provisions of these laws. These statements may be identified by the use of forward-looking terminology such as “anticipate,” “believe,” “budget,” “can,” “contemplate,” “continue,” “could,” “envision,” “estimate,” “expect,” “evaluate,” “forecast,” “goal,” “guidance,” “indicate,” “intend,” “likely,” “may,” “might,” “outlook,” “plan,” “possibly,” “potential,” “predict,” “probable,” “probably,” “pro-forma,” “project,” “seek,” “should,” “target,” “view,” “will,” “would,” “will be,” “will continue,” “will likely result” or the negative thereof or other variations thereon or comparable terminology. In particular, discussions and statements regarding the Company’s future business plans and initiatives are forward-looking in nature. We have based these forward-looking statements on our current expectations, assumptions, estimates, and projections. While we believe these to be reasonable, such forward-looking statements are only predictions and involve a number of risks and uncertainties, many of which are beyond our control. These and other important factors may cause our actual results, performance, or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements, and may impact our ability to implement and execute on our future business plans and initiatives. Management cautions that the forward-looking statements in this release are not guarantees of future performance, and we cannot assume that such statements will be realized or the forward-looking events and circumstances will occur. Factors that might cause such a difference include, without limitation: risks associated with our inability to identify and realize business opportunities, and the undertaking of any new such opportunities; general conditions in the global economy, including the impact of health and safety concerns from the current COVID-19 pandemic; our lack of operating history or established reputation in the reinsurance industry; our inability to obtain or maintain the necessary approvals to operate reinsurance subsidiaries; risks associated with operating in the reinsurance industry, including inadequately priced insured risks, credit risk associated with brokers we may do business with, and inadequate retrocessional coverage; our inability to execute on our investment and investment management strategy, including our strategy to invest in the risk capital of special purpose acquisition companies (SPACs); potential loss of value of investments; risk of becoming an investment company; fluctuations in our short-term results as we implement our new business strategy; risks of being unable to attract and retain qualified management and personnel to implement and execute on our business and growth strategy; failure of our information technology systems, data breaches and cyber-attacks; our ability to establish and maintain an effective system of internal controls; our limited operating history as a public company; the requirements of being a public company and losing our status as a smaller reporting company or becoming an accelerated filer; any potential conflicts of interest between us and our controlling stockholders and different interests of controlling stockholders; potential conflicts of interest between us and our directors and executive officers; risks associated with our related party transactions and investments; and risks associated with our investments in SPACs, including the failure of any such SPAC to complete its initial business combination. Our expectations and future plans and initiatives may not be realized. If one of these risks or uncertainties materializes, or if our underlying assumptions prove incorrect, actual results may vary materially from those expected, estimated or projected. You are cautioned not to place undue reliance on forward-looking statements. The forward-looking statements are made only as of the date hereof and do not necessarily reflect our outlook at any other point in time. We do not undertake and specifically decline any obligation to update any such statements or to publicly announce the results of any revisions to any such statements to reflect new information, future events or developments.

View source version on businesswire.com: https://www.businesswire.com/news/home/20221221005289/en/

INVESTOR RELATIONS:

IMS Investor Relations

John Nesbett/Jennifer Belodeau

(203) 972-9200

IR@fgfinancial.com

Source: FG Financial Group, Inc.

FAQ

What is the new initiative announced by FG Financial Group on reinsurance sidecars?

FG Financial Group announced the formation of a reinsurance sidecar, FG Re Investors I LLC, to enhance its reinsurance portfolio.

Who is involved in the capital raise for FG Financial Group's new reinsurance sidecar?

Castle Placement, LLC has been engaged as the exclusive placement agent for the capital raise of FG Re Investors I LLC.

What potential opportunities does FG Financial Group see in the reinsurance market?

FG Financial Group's CEO noted that the reinsurance market is the strongest seen in decades, providing compelling opportunities for profitable growth.

How does FG Financial Group plan to support its reinsurance portfolio?

The company intends to raise third-party investor capital through the newly formed FG Re Investors I LLC.