London-listed alternative investment manager Man Group has agreed to acquire a 25 per cent stake in Nephila Capital, a specialist manager working with insurance-based instruments such as i
London-listed alternative investment manager Man Group has agreed to acquire a 25 per cent stake in Nephila Capital, a specialist manager working with insurance-based instruments such as insurance-linked securities, catastrophe bonds, insurance swaps and weather derivatives.
Established in 1998, Nephila is headquartered in Bermuda, employs 25 staff and has some USD2.4bn under management as of May 28. In addition to insurance linked instruments, which are primarily related to natural catastrophe risk, Nephila has been trading weather risk since 2000 and launched a dedicated weather vehicle in 2005.
The minority stake in Nephila will be held by Man’s multistrategy private equity manager, Man Environmental Capital Opportunities, which specialises in environmental finance. Nephila’s three managing principals, co-founders Frank Majors and Greg Hagood and Barney Schauble, will continue to manage the business and the underlying fund investments.
‘This transaction further develops Man’s strategy to expand the range of opportunities for our investors,’ says Man Group chief executive Peter Clarke. ‘The natural catastrophe and weather derivative markets offer significant opportunities for uncorrelated alternative investment returns. We are excited at the prospects of this strategic partnership and what it means for our and Nephila’s investors.’
Adds Majors: ‘We are delighted to join Man in a partnership that will open up international markets and allow us to focus on evaluating investment opportunities and portfolio management.’
Man Group, which traces its origins back to a business originally founded in 1783, manages assets totalling more than USD78bn and employs 1,600 people in 13 countries. Man Group is listed on the London Stock Exchange with a market capitalisation of about USD20.7bn.
Man Environmental Capital Opportunities seeks to capitalise on investment opportunities arising from environmental concerns, seeding and managing funds specialising in environmental investment projects and other areas where returns are driven by the natural environment. Man ECO, which began operations in 2006 and was established as a single manager within Man Investments earlier this year, has some USD600m in funds under management.
