Private-equity funds run by US banking giant Goldman Sachs have agreed to pay more than $290 million for a near 20 percent stake in Bermuda-based Enstar Group Ltd.The affiliated funds of GS Capital Partners (GSCP) will invest up to $291.6 million for up to a 19.9 percent fully diluted economic interest in Enstar at a price of $86 per share, Enstar announced late last week.Additionally GS Capital Partners will also receive warrants to acquire an additional two percent interest in Enstar at an exercise price of $115 per share.Shares in Enstar, which specialises in acquiring and managing insurance and reinsurance companies in run-off, closed at $100.65 in New York trading last Thursday.Run-off occurs when an insurer stops writing new business, but still have to be managed to deal with their continuing obligations, particularly claims from policyholders.“There are great opportunities out there in the run-off space and this increase of our capital base will help us to pursue them,” Enstar’s joint chief operating officer Paul O’Shea told The Royal Gazette.“A major investment in Enstar by a firm with the prestige of Goldman Sachs is a major endorsement of Enstar and its business capabilities, but it’s also a major endorsement of Bermuda as a domicile for insurance companies.”Enstar has amassed an empire of some $10 billion in assets acquired, purchased at an approximate average of 20 cents on the dollar, as previously reported by The Royal Gazette.In the second half of last year, Enstar made some 13 acquisitions, as attractive run-off opportunities grew around the world. Companies running off lines of business as they restructure in order to cut costs, to focus on their core competencies or to improve their capital position as they prepare for Solvency II are some of the reasons behind these opportunities.Enstar, which has around 340 employees, 32 of whom work at its headquarters in offices on the third floor of Windsor Place, Hamilton, also has operations in the UK and Australia.The company is led by chief executive officer Dominic Silvester and joint chief operating officers Nick Packer and Mr O’Shea.“We see tremendous opportunity in front of us to build on Enstar’s unique skills and capabilities in the insurance and reinsurance run-off market,” Mr Silvester said in a statement.“This capital raise with Goldman Sachs gives Enstar greater financial flexibility to pursue acquisitions of companies and portfolios of business in run-off for the benefit of all Enstar shareholders. We thank Goldman Sachs for their support of Enstar and look forward to a long and productive relationship with them.”A shareholder vote to approve to the third tranche, representing $98.7 million of the investment, will be necessary. Enstar said shareholders representing 34.35 percent of the company’s outstanding voting power have already committed to vote in favour of the deal.“GS Capital Partners has a long history of investing in market-leading financial services franchises, said Sumit Rajpal, managing director of financial services investing for GSCP. “We view Enstar as a leading player in the insurance and reinsurance run-off market and believe that our capital will help Enstar grow considerably over time.”Enstar has appointed Mr Rajpal to Enstar’s board of directors, effective May 16, 2011.