Fairfax Financial Holdings, a Toronto-based financial services holding company, has acquired a 7.15% stake in Africa Reinsurance Corporation (Africa Re) for $61m.

The new strategic partnership with Fairfax, after the recent entry of AXA in February 2015, has strengthened Africa Re with a $122m capital.

Corneille Karekezi, Africa Re Group Managing Director and CEO, said: “We will work together to strengthen our positions in the reinsurance market with regard to product development, underwriting expertise, human capacity development, actuarial services, enterprise risk management, corporate governance, claims management and investment.”

Karekezi said it is a great development for Africa Re, demonstrating the maturity of the company, its commitment and ability to strategically position itself in the fast changing and competitive landscape of the international reinsurance industry.

The shareholding structure of Africa Re changed over time from a pure multilateral institution in the 1970s and 1980s to a diversified shareholding comprising 41 African states (34%), over 100 African insurance and reinsurance companies (33%), the African Development Bank (8%), IRB-Brasil Re, a leading Brazilian reinsurer (8%), AXA, the global leading French insurer that joined recently with a 7.15% stake and Proparco, a branch of the Agence Française de Development.

Until recently, the International Finance Corporation (IFC), member of the World Bank Group, DEG (branch of the KfW bank) and FMO (Dutch development bank) constituted the core of the non-African shareholding capped at 25% of the capital of Africa Re.

Fairfax has acquired part of the shares put back by those DFIs that invested in Africa Re capital in 2004 and are exiting in accordance with a put option agreement allowing them to exit after the elapse of their investment horizon.

Africa Re posted a net profit of $118.50m for the full year 2014 compared to $84.80m in 2013, representing an increase of 39.74%.

Income earned by the Corporation from investment and other sources, including interest on reinsurance deposits and fee income increased by 8.84% to stand at $50.5m compared to $46.4m in 2013.

Investment performance continues to be driven mainly by the equity and bond markets, Africa Re said.

Currency translation had a negative impact on the investment income.

On an annualized basis, the return on investment was 4.78% compared to 4.53% as at same period last year.

The African Reinsurance Corporation plans to expand operations into Angolan and Algerian markets.