Markel to acquire Nephila

Markel Corporation and Bermuda-headquartered Nephila Holdings have entered into a definitive agreement for Markel to acquire all of the outstanding shares of Nephila.

Markel described Nephila as “the pre-eminent insurance-linked securities manager in the world”, adding that Nephila brings deep and long-term investor relationships, tremendous energy, creativity and innovation in matching investor risk appetites with client needs.

Nephila, whose revenue is driven primarily through management and incentive fees, manages over $12 billion of assets under management for over 300 investors.

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, according to Markel. The transaction is not subject to any financing condition, and Markel plans to finance the transaction using cash balances on hand.

The company said that 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.

According to Markel 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.”

“We are excited to welcome Nephila to the Markel team,” said Richie Whitt, Markel's co-chief executive officer. “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.”

Whitt added, "The combined assets under management (AUM) between Nephila and Markel CATCo will stand at approximately $19 billion, representing approximately 20 percent of the insurance-linked securities sector. With this transaction, Markel is set to become the largest manager of funds in this sector."

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."