Aeolus Capital Management Ltd., the Bermuda based reinsurance and insurance-linked securities (ILS) focused investment fund manager, took an allocation amounting to roughly $102.85 million from asset management giant Blackstone earlier this year.
The allocation came from Blackstone Alternative Asset Management, the hedge fund solutions unit of Blackstone which has around $78 billion under management.
Specifically, the investment was made on behalf of the Blackstone Alternative Multi-Strategy Fund and was channelled to ILS fund manager Aeolus’ flagship Property Catastrophe Keystone PF Fund LP.
Blackstone has long appreciated the returns possible in ILS and reinsurance, having worked closely with ILS fund manager Nephila Capital since at least 2013, with Nephila acting as a sub-adviser to a number of Blackstone’s multi-strategy alternatives funds, including this one.
Blackstone also became an anchor investor in ILS and reinsurance focused investment manager Hudson Structured Capital Management’s funds and is also the asset manager behind AXIS Capital’s Harrington Re total-return reinsurance vehicle.
The investment manager clearly continues to appreciate ILS market returns, making the $102.85 million investment in Aeolus’ Property Catastrophe Keystone PF Fund LP on January 2nd 2019.
The investment in the Aeolus managed ILS and reinsurance fund has performed admirably for Blackstone as well, with the valuation of its investment reported as worth just over $113.31 million as of September 30th 2019, which represents a 10% return in just nine months.
As ILS fund returns go that is towards the upper-end of where the majority fell after the first nine months of this year.
Aeolus will have benefited from improved rates at the renewals to start off 2019 and Blackstone’s allocation was made just in time to reap the benefits of improving reinsurance market conditions.