A new $133 million "sidecar" called Globe Re has been set up in Bermuda.

German reinsurance company Hannover Re and independent reinsurance and risk intermediary Benfield Group Ltd. are the investors behind the entity, created to provide extra capacity for US natural catastrophe risks.

Benfield Group Ltd. has invested $20.5 million in cash into Globe Re, which has been writing business since the start of this month. Benfield Advisory, Benfield's specialist corporate finance and advisory business, is the joint structurer and placement agent for the sidecar, which was captalised with $33 million of equity and $100 million of debt securities.

This is the third major sidecar vehicle providing significant capacity for US natural catastrophe risks created by Benfield Advisory. Grahame Chilton, chief executive of Benfield said: "Benfield Advisory led the way in creating capacity for our customers' Florida catastrophe exposures with Starbound I in 2006 and Starbound II in 2007.

"Once again, we have demonstrated the strength of our capabilities in the capital markets interface with the reinsurance sector. I am delighted that we have made an investment in this innovative vehicle."