Company: KG
Filing Date: 2025-08-15
Form Type: 10-Q
Source: 0002055116-25-000018
Chunk: 339

Company: Kestrel Group Ltd
Filing Date: 2025-08-15
Form: 10-Q
Item: Item 8
Chunk 339
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 investments, including the need to involve fair value specialists possessing relevant valuation experience to evaluate the appropriateness of the valuation techniques and the significant unobservable inputs used in the valuation of such investments which may differ from the valuation techniques and inputs utilized by Kestrel Group and its third-party valuation firms and/or may change over time. The effect of all these factors on Kestrel Group’s portfolio may reduce Kestrel Group’s net asset value by increasing unrealized depreciation in Kestrel Group’s portfolio. Depending on market conditions, Kestrel Group could incur substantial realized losses and may suffer additional unrealized losses in future periods, which could have a material adverse effect on Kestrel Group’s business, financial condition, results of operations and prospects.

In addition, alternative or “other” investments may not meet regulatory admissibility requirements or may result in increased regulatory capital charges to Maiden’s insurance subsidiaries that hold these investments, which could limit those subsidiaries’ ability to make capital distributions to Kestrel Group, which in turn could adversely affect Kestrel Group’s business, financial condition, results of operations and prospects.

Performance of Kestrel Group’s investment portfolio will be subject to a variety of investment risks.

Kestrel Group’s operating results will be affected, in part, by the performance of its investment portfolio. Interest rates are highly sensitive to many factors, including governmental monetary policies, domestic and international economic and political conditions and other factors beyond Kestrel Group’s control. Although Kestrel Group will take measures to manage investment risks, it may not be able to fully or effectively mitigate interest rate sensitivity. Despite any mitigation efforts, a significant change in interest rates could have a material and adverse effect on Kestrel Group’s business, financial condition, results of operations and prospects.

In addition, the performance of Kestrel Group’s investment portfolio will generally be subject to other risks, including the following:

• deterioration in the financial condition, operating performance or business prospects of one or more issuers of its fixed-income securities;

• heavy concentration of the investment portfolio in the securities of a few issuers, sectors or industries;

• inability to convert investment securities into cash on favorable terms and on a timely basis; and

• general movements in the securities markets.

 90

A substantial decline in its investment portfolio could have a material and adverse effect on Kestrel Group’s business, financial condition, results of operations and prospects.

We identified a material weakness in our internal controls 

Our management identified a material weakness related to our internal control over financial