Reinsurance and financial management holding company FG Financial Group has said it intends to grow through the formation of a new merchant banking division.
The firm said in a statement that it will work with Fundamental Global, a private partnership led by Kyle Cerminara and Joe Moglia, along with other strategic investors, on the venture.
Larry Swets, Jr., CEO of FG Financial Group, said: “Evolving our strategy to encompass merchant banking is a natural progression which builds upon our initial success with our reinsurance and SPAC businesses and fortifies our strategy of leveraging the team’s proven experience running, sponsoring and creating innovative structures for growing businesses.”
He added: ”Given our deep relationships and exposure to multiple industries, we see many companies in need of merchant banking services and this new division will offer us enhanced flexibility to capitalise on asymmetric risk/reward opportunities.”
This announcement comes only a few weeks after the firm reported an increase in its reinsurance premiums despite seeing a net loss in the second quarter of 2022.
In August, FG Financial said that its net premiums earned increased from $0.9m in Q2 2021, to $3.0m in this year’s second quarter. The group’s net loss increased to $5.9m, compared to a net loss of $0.7m in Q2 2021.
The company also reported a net investment loss of $3.7m compared to net investment income of $2.2m in the prior year second quarter.
Additionally, FGF paid the 8% Series A Preferred Share dividend of $0.45m, which represents the company’s 17th consecutive quarter of paying the full dividend due on the 8% Series A Preferred Shares since their issuance in February 2018.
