Elliot acquires a controlling interest in Aeolus

Aeolus Capital Management (Aeolus), a Bermuda-based capital management company, has reached an agreement in principle under which Elliott Management Corporation (Elliott), through an affiliate, will acquire a controlling interest in Aeolus and its affiliated entities.

The selling shareholders, Peter Appel, founder of Aeolus, and Allied World Assurance Company (Allied World), will each retain significant minority ownership positions, with Appel continuing to serve Aeolus as its non-executive chairman, whilst Allied World will continue as a substantial capital provider to the investment funds managed by Aeolus.

The Aeolus 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 the closing of the transaction.

“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,” said Appel.

“Elliott is one of the world’s most highly respected hedge funds, having compiled an extraordinary record of outstanding and consistent performance over nearly forty 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 Cicrelli, a portfolio manager at Elliot, said: “Elliott is pleased to become a full partner in the ownership and stewardship of Aeolus. 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 recognized 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.”