Steadfast has bought a 50% stake in an Australian and New Zealand reinsurance brokerage previously owned by Canada’s Beach Capital Holdings.

Beach Sydney, active in Australia since January 2004, has left its parent in a management buyout led by Simon Cloney.

The deal was completed at the end of last month, paving the way for the brokerage to enter the joint equity arrangement with Steadfast.

Mr Cloney says it will help the company, renamed Steadfast Re, to expand its business, increase its market clout and defend its territory against larger rivals.

“It’s an offensive and defensive move,” he told insuranceNEWS.com.au. “Now we have the strength of Steadfast behind us.”

Steadfast CEO Robert Kelly, who becomes chairman of the joint venture, says the arrangement introduces a further complementary business to his group.

“We plan to help Simon and his team develop the business by providing them with access to our network of 311 broker businesses and enhancing their relationships with our strategic partners,” he said.

Steadfast Re is forecast to achieve earnings before interest, tax and amortisation of about $1 million this financial year.

Beach Sydney accessed the insurance-linked securities market to build its property and catastrophe reinsurance treaty business, and has also focused on casualty facultative reinsurance, where it has a significant share of the brokered market.

“We pioneered the introduction of capital markets reinsurance into Australia,” Mr Cloney said.

Beach & Associates – the operating subsidiary of Beach Capital Holdings – and Steadfast Re will continue to work together via a formal wholesaling agreement.

Beach will also provide back-office support through the transition and will continue to be responsible for business undertaken before July 31.