KKR & Co. L.P. (NYSE: KKR), a leading global investment firm, and Nephila Capital Ltd. (“Nephila”), a leading investment manager focused on investing in natural catastrophe and weather risk, today announced KKR’s acquisition of a 24.9% interest in Nephila. Shares will be acquired pro rata from Nephila management and from Nephila’s minority stakeholder, Man Group plc, which will retain an 18.75% interest. Financial terms of the transaction were not disclosed.
Nephila was established in 1998 by Frank Majors and Greg Hagood as part of Willis Limited, at the time a KKR portfolio company. Nephila specializes in investing in reinsurance risk, including insurance-linked securities, catastrophe bonds and weather derivatives. Through its investment strategies, Nephila provides its investors with access to sources of returns that are uncorrelated to the global financial markets relative to other asset classes.
Henry Kravis and George Roberts, Co-Chairmen and Co-CEOs of KKR, said: "In backing Nephila, we are partnering with a team we have known for more than 15 years, dating back to our investment in Willis Group. As the first dedicated manager of catastrophe risk investment strategies, they share the entrepreneurial spirit that pervades KKR’s culture and, with an excellent 14 year track record, we think they are the best team in the industry.”
Nephila’s management committee stated: “Having access to KKR’s global network of relationships, infrastructure and management expertise will open up new doors for Nephila and our investors. We’re confident that our new partnership will strengthen relationships with our insurance counterparties and introduce new sources of investment opportunity, particularly with state governments that are exploring new ways to transfer catastrophe exposures.”Through its investments, Nephila provides capital relief to primary insurers, reinsurers and state governments in catastrophe-prone areas, giving them the flexibility to write additional insurance for homeowners and businesses.
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