Gamut Re opens after raising $310 million

HAMILTON, Bermuda--Gamut Reinsurance Ltd., a new catastrophe reinsurer, has raised $310 million in a private placement of five classes of notes structured to provide varying levels of risk and return to investors.

Domiciled in the Cayman Islands, Gamut Re will be managed by Bermuda-based Nephila Capital Ltd., an investment manager specializing in catastrophe and weather risk products.

Gamut Re will write a variety of fully collateralized reinsurance products, including traditional cat covers and industry loss warranties, as well as buying and selling cat bonds, said Barney Schauble, a Nephila partner.

Nephila intends to manage the reinsurance portfolio to provide varying levels of return to the institutional investors that bought Gamut Re's notes. The classes of notes range from a relatively low-risk, low-return class rated Aa3 by Moody's Investors Service and A- by Standard & Poor's Corp., to a higher-risk, higher-return class that is unrated, according to Nephila.

The private placement was underwritten by Goldman Sachs & Co. and Swiss Re Capital Markets. Gamut Re's notes were aimed at investors looking for noncorrelated investment risk, so while the noteholders include some life insurers, they include no property/casualty companies, Mr. Schauble said.

Nephila was originally formed in 1997 by Willis Group Holdings Ltd. Willis later sold the firm to its management, which includes Frank Majors and Greg Hagood, former Willis reinsurance executives; and Mr. Schauble, a former executive of Guy Carpenter & Co. Inc. and XL Capital Ltd.