Commercial insurance underwriter Assetinsure has severed ties with troubled investment firm Babcock & Brown which has sold its 50% stake in the insurer.

Existing Assetinsure Holdings shareholders and management have extended their stake in the business from 50% to 70% while Global Group of Australia has picked up a 30% stake.

German-based Global previously owned reinsurer Gerling Global Re, which Assetinsure purchased in 2003. Assetinsure then transformed the business into an insurance company under the existing name.

CEO Peter Wedgwood told insuranceNEWS.com.au the Global equity is “a welcome return”.

“To have them back with a 30% stake is terrific,” he said. “Obviously people saw us as a Babcock & Brown company and that created some negative sentiment. Although we weren’t materially affected, we did get a lot of enquiries. This gives us a good outcome.”

In January, Babcock & Brown announced it held negative net assets at December 31, creating uncertainty among Assetinsure clients.

Though Babcock & Brown will continue trading, the firm will conduct further asset sales during the next two to three years to reduce corporate debt facilities in order to stay afloat.