Allied World Assurance Company (AWAC) announced on Wednesday that it has acquired a minority stake in Aeolus Capital Management as it expands its Allied World Financial Services.
The acquisition appears to be the latest move by a re/insurer linked to the Bermuda market to strengthen their links with asset management expertise associated with the reinsurance sector, in this case through a third-party asset manager.
Aeolus, a privately-owned, Bermuda-based asset management company, manages capital on behalf of investors seeking to invest in the property catastrophe, reinsurance and retrocession market.
Under the terms of the agreement, Allied World - already a quota share partner of Aeolus - will also increase the amount of capital it deploys through the asset management company and will extend its capital commitment for at least three years, starting on the first day of the New Year.
Scott Carmilani, president and CEO of Allied World, said: "we have been working with the Aeolus team for some time in the collateralised reinsurance market and have great respect for their capabilities, expertise and track record. It is a very efficient way to consistently deliver optimal returns, and I firmly believe Aeolus' platform for managing capital to be the property cat model of the future. We are excited about this partnership and how it will work to complement both entities' overall portfolios and returns."
Peter Appel, chairman and CEO of Aeolus Capital, added: "in addition to providing Aeolus with a substantial, longer term capital commitment our cedants can rely on, this transaction allows us to bring into the fold a very knowledgeable and collaborative partner who can provide us with invaluable insight and additional resources as we continue to expand our presence in the property catastrophe market. Allied World's strong commitment to Aeolus provides real validation of our overall approach to the reinsurance and retrocession market and will serve our investors and cedants well."
Allied World, Aeolus Capital, M&A, reinsurance, Bermuda