Multi-strategy hedge fund manager Elliott Management Corporation, through an affiliate, is to acquire a controlling interest in Aeolus Capital Management (ACM) and its affiliated entities.
The transaction is subject to the completion of definitive documentation and regulatory approval and is expected to be completed before year end.
The selling shareholders – Peter Appel, founder of ACM, and Allied World Assurance Company – will each retain significant minority ownership positions, with Appel continuing to serve ACM as its non-executive chairman and Allied World continuing as a substantial capital provider to the investment funds managed by ACM.
The ACM management team, led by Andrew Bernstein, Chris Grasso, Trevor Jones and Frank Fischer, will continue in their current roles and will retain their entire equity ownership interest in the business following closing of the transaction.
Appel says: “This transaction has been months in the making, and we have worked carefully to ensure that this new partnership will serve the best interests of our investors. Elliott is one of the world’s most highly respected hedge funds, having compiled an extraordinary record of outstanding and consistent performance over nearly 40 years. More importantly for us, though, Elliott shares our analytical and disciplined approach to generating exceptional risk-adjusted returns for our investors, and will provide us with access to additional resources, insights and relationships to help us broaden our product offerings and further establish Aeolus as an enduring and growing franchise.”
Mark Cicirelli, a portfolio manager at Elliott, says: “Elliott is pleased to become a full partner in the ownership and stewardship of ACM. We have been investing in Aeolus since 2012 and are also very familiar with the company as a core reinsurance provider to Asta’s Syndicate 4242 at Lloyd’s in which we are invested. Over the years we have developed a strong relationship with the Aeolus management team and have long recognised their ingenuity and skill in managing capital on behalf of their investors and structuring reinsurance and retro protection for their cedants. We believe Aeolus is the pre-eminent asset manager in the industry and we look forward to working closely with our new partners.”
