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KKR Acquires Stake in Nephila

Nephila invests in insurance-linked securities, catastrophe bonds and weather derivatives

Private equity firm KKR & Co. LP (NYSE: KKR) has acquired an interest in Nephila Capital Ltd., a company that invests in reinsurance risk.

Nephila invests in insurance-linked securities, catastrophe bonds and weather derivatives to provide investors with access to returns that aren’t related to the global financial markets. KKR bought a 24.9 percent interest from Nephila’s management as well as a portion of the stake owned by hedge-fund manager Man Group plc (LON: EMG) for an undisclosed amount. 

Once the deal wraps up, Man Group will retain 18.75 percent of Nephilia, reducing its stake from 25 percent, which it purchased in 2008.

Through its investments, Nephila provides capital relief to primary issuers, reinsurers and state governments in catastrophe-prone areas. The company has about $8 billion in assets under management.

Hamilton, Bermuda-based Nephila was started in 1998 as part of Willis Ltd., a KKR portfolio company at the time.

The investment is part of KKR’s efforts to broaden its offering of liquid-alternative investment strategies and expand its hedge fund platform.

KKR was founded in 1976 by Henry Kravis and George Roberts. The firm has more than $66.3 billion assets under management. The deal was announced Jan. 23.

 

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