Nephila attracts $1bn+ inflows, launches ESG & Lloyd’s ILS fund strategies

Nephila Capital, the largest dedicated manager of insurance and reinsurance linked investment funds and assets, is expected to benefit from growing investor interest in the sector, with inflows of more than $1 billion anticipated in 2021, according to Markel Corporation executives.

Having returned to growth, in terms of assets under management, in the fourth-quarter of 2020, ILS manager Nephila Capital could find itself returning towards previous highs in AuM over the course of this year.

The ILS fund manager has also expanded its investor offering at the start of 2021, with a focus on ESG and climate impact investments in one new strategy, as well as a broad focus on delivering returns from the Lloyd’s market in another.

Speaking during Markel’s earnings call today, Richie Whitt, Co-CEO explained, “For 2021, Nephila has received in excess of $1 billion of new subscriptions to-date. This was driven by improving market conditions and in part by opportunities created with the transfer of our Markel Global Re property cat portfolio to Nephila.

“A portion of this capital was deployed at 1/1 and additional amounts will be deployed at major renewal dates throughout the year.

“Nephila was also able to establish and are working on new investment vehicles. These include an ESG impact fund and a Lloyd’s syndicate multi-class fund.”

Timing will be all-important in recognising how these new inflows lift the AuM at Nephila Capital, with Whitt explaining that it will be tempered by impacts of catastrophe activity, as well as redemptions, particularly at the start of the year.

But overall, it looks like the Nephila operation is returning to robust growth and will be well-able to capitalise on the opportunities in ILS and reinsurance moving forwards.

“Going forwards, we feel strongly about the prospects for our ILS operations,” Whitt explained.