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Caisse de dépôt et placement du Québec (CDPQ) and Ontario Teachers’ Pension Plan (OTPP) have been named founding investors of an up-and-coming insurance holdings company.
The holdings company, Constellation Insurance Holdings, was founded by Anurag Chandra, former CEO of Prosperity Life Insurance Group. Both CDPQ and OTPP raised US$500 million (about $653,500,000) in initial capital for Constellation.
“We believe this new partnership, which allies a unique combination of expertise to a flexible investment horizon, will provide a source of competitive advantage for Constellation,” commented CDPQ executive vice-president and head of private equity Stephane Etroy.
“We are delighted to partner alongside CDPQ with Anurag Chandra, who has a distinctive and successful track record in the insurance sector including acquisitions, demutualizations, turnarounds and rehabilitations,” added OTPP executive managing director of equities Jane Rowe.
Constellation founder, chairman and CEO Anurag Chandra explained in a statement that his company has plans to invest in stock and mutual insurers based in North America that are “seeking growth capital, stronger ratings, scale efficiencies and equity incentives” – all while maintaining their independent management structure and brand identity.
“Constellation’s target market and value proposition are differentiated versus other insurance platforms that focus on either asset accumulation, legacy block reinsurance or have shorter term investment horizons, which incentivize substantial expense reductions and limit investments in organic new business growth,” Chandra added.
A release noted that CDPQ and Ontario Teachers’ are two of North America’s largest institutional investors. As of June 30, 2019, the two manage more than $500 billion in net assets.
