Elliott Management will acquire a controlling ownership stake in Aeolus Capital Management, a property catastrophe reinsurance investment boutique.
The deal is subject to regulatory approval and is expected to close before the end of the year, an Aeolus news release said. Terms were not disclosed.
Michael O'Looney, an Elliot spokesman, declined to comment. Peter Appel, Aeolus' founding partner, chairman and CEO, said in an e-mail that firm executives won't discuss the transaction publicly prior to the deal's closure.
Mr. Appel and Allied World Assurance Co. each will continue to hold “significant” minority interests in Aeolus, the release said. Mr. Appel will remain chairman of Aeolus and Allied World will continue to invest in Aeolus reinsurance funds. Members of Aeolus' investment team will retain their equity interest in the firm and continue to manage the firm independently from Hamilton, Bermuda.
“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,” Mr. Appel said in the release.
Elliott has been investing with Aeolus since 2012, said Mark Cicirelli, an Elliott portfolio manager, adding in the release that “over the years, we have developed a strong relationship with the Aeolus management team and have long recognized their ingenuity and skill in managing capital on behalf of their investors … we believe Aeolus is the pre-eminent asset manager in the (reinsurance) industry and we look forward to working closely with our new partners.”
Aeolus manages $2.7 billion in reinsurance strategies and Elliott runs $29 billion in hedge funds.