Allied World and Aeolus Capital Management Announce Strategic Partnership
PR Newswire Association LLC
ZUG, Switzerland, Dec. 18, 2012 /PRNewswire/ -- Allied World Assurance Company Holdings, AG announced plans to expand its Allied World Financial Services platform through the purchase of a minority stake in Aeolus Capital Management Ltd., a privately owned, Bermuda-based asset management company that manages capital on behalf of investors seeking to invest in the property catastrophe reinsurance and retrocession market. In addition to acquiring a minority stake in Aeolus Capital, under the terms of the transaction, Allied World, an existing quota share partner of Aeolus, will increase the amount of capital it deploys in the reinsurance and retrocession market through Aeolus and will extend its capital commitment to Aeolus for at least three years, commencing January 1, 2013.
Scott Carmilani, President and CEO of Allied World, commented, "We have been working with the Aeolus team for some time in the collateralized 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."
Commenting further on the transaction, John Gauthier, President of Allied World Financial Services, said, "This is the third transaction that we have announced since launching Allied World Financial Services Company earlier this Fall. The goal of Allied World Financial Services is to continue to minimize out-sourced expenses, increase expertise and participate in the economic returns of our partners. Aeolus is a highly attractive investment for us given its strong track record of managing collateralized reinsurance assets, the level of service it provides to its investors and cedents, and the highly experienced management team."
Peter Appel, Chairman and CEO of Aeolus Capital, said, "In addition to providing Aeolus with a substantial, longer term capital commitment our cedents 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 cedents well."
Berkshire Capital Securities, LLC advised Allied World on the transaction.
Aeolus Capital Management Ltd., founded by Peter Appel, a founder and former President and CEO of Arch Capital Group Ltd., and David Eklund, former President and Chief Underwriting Officer of Renaissance Re Ltd., manages capital through a variety of investment vehicles on behalf of investors seeking the risk/reward and diversification benefits available from investing in the property catastrophe reinsurance and retrocession market. Aeolus Capital and its wholly owned subsidiary, Aeolus Re Ltd., and affiliated entities, are the successors to the business of Aeolus Reinsurance Ltd., a Bermuda-based reinsurance company founded in 2006 by Messrs. Appel and Eklund, which became a global leader in providing collateralized property catastrophe reinsurance and retrocession protection. Since its inception in 2011, Aeolus Capital's assets under management have grown to over $1.7 billion, and since 2007, Aeolus and its predecessor have provided over $12 billion of capacity to its cedents.
Allied World Assurance Company Holdings, AG, through its subsidiaries, is a global provider of innovative property, casualty and specialty insurance and reinsurance solutions, offering superior client service through a global network of offices and branches. All of Allied World's rated insurance and reinsurance subsidiaries are rated A by A.M. Best Company, A by Standard & Poor's, and A2 by Moody's, and our Lloyd's Syndicate 2232 is rated A+ by Standard & Poor's and Fitch. Please visit www.awac.com for further information on Allied World.