Markel Corporation To Acquire Nephila Holdings
Markel Corporation and Nephila Holdings Limited announced today that they have entered into a definitive agreement for Markel to acquire all of the outstanding shares of Nephila.
“Nephila is the pre-eminent insurance-linked securities manager in the world. Nephila brings deep and long-term investor relationships, tremendous energy, creativity and innovation in matching investor risk appetites with client needs,” the announcement said.
“Nephila, whose revenue is driven primarily through management and incentive fees, manages over $12 billion of assets under management for over 300 geographically diverse investors. Adding the unique and proven talents of Nephila to the specialty insurance and reinsurance platforms of Markel will produce a powerful combination that will drive long-term growth and value to the benefit of the companies’ investors.”
Richie Whitt, Markel’s Co-Chief Executive Officer, commented, “We are excited to welcome Nephila to the Markel team. Frank Majors and Greg Hagood have built the industry’s pre-eminent and longest-tenured insurance-linked securities manager.
“With a proven 20 year track record of success, they bring with them an incredibly experienced and talented management team and a culture of creativity, innovation and excellence that exemplifies the Markel Style.
“The addition of Nephila to Markel’s insurance, reinsurance, insurtech, fronting, and existing insurance-linked securities capabilities will enhance and strengthen the breadth and depth of Markel’s offerings to policyholders, producers and investors.”
Frank Majors, Nephila’s Co-Chief Executive Officer, remarked, “We are delighted to be joining Markel, a company with a similar culture, strategic outlook and long-term focus. They have built a great company with a sterling reputation for both outstanding performance and a collaborative business approach, and have a proven track record of successful acquisitions.
“Markel shares our strategic vision for the future of the insurance markets; this transaction will allow us to accelerate our delivery of that strategy, creating additional value for our investors and our trading partners. We are looking forward to working with the Markel team, and are excited by the possibilities from our combined strengths.”
Greg Hagood, Nephila’s Co-Chief Executive Officer, added, “As the industry continues to evolve, we believe the resources and expertise from both platforms will provide meaningful benefits to our investor base, as it combines the investment independence of a 20 year, stand-alone insurance-linked securities manager with the additional resources of a well-respected and strongly rated insurer. We are excited about leveraging these joint resources on behalf of our investors in the years ahead.”
Upon completion of the transaction, Nephila will continue to operate as a separate business unit. The management team, led by Greg Hagood and Frank Majors, will remain in place and will continue to be based in Bermuda, San Francisco, CA, Nashville, TN and London.
The transaction, which is subject to approvals by relevant insurance regulators and other customary closing conditions, is expected to close in the fourth quarter of 2018. The transaction is not subject to any financing condition, and Markel plans to finance the transaction using cash balances on hand.
Whitt added, “The combined assets under management [AUM] between Nephila and Markel CATCo will stand at approximately $19 billion, representing approximately 20% of the insurance-linked securities sector. With this transaction, Markel is set to become the largest manager of funds in this sector.”
