Man-backed Nephila attracts strong UK inflows

Insurance-linked securities specialist Nephila Capital has announced inflows during the second half of 2009 of $340 million from 11 UK institutions into its catastrophic reinsurance fund.

The company, in which Man Group holds a 25% stake, now has total assets under management (AUM) of $2.6 billion.

Bermuda-based Nephila's investment funds and managed accounts focus on investing in insurance-linked instruments such as catastrophic bonds. These securities spread the risk of insured claims from natural disasters such as hurricanes and earthquakes and are uncorrelated to the markets.

Nephila co-founder Greg Hagood said: "Insurance payouts for damages caused by hurricanes Gustav and Ike and the heavy investment losses and liquidity constraints brought about by the financial crisis have led to a major market shake out. Remaining participants, such as Nephila, have therefore been able to capitalise on this opportunity and charge higher catastrophe premiums."

Man's head of UK institutional sales Paul Dackombe said investors were looking for income that was independent of the capital markets.

Nephila also announced the appointment of two new partners. Steve Glassman joined the company in February from Merrill Lynch and will focus on strategy, product structuring and the management of human resources and business processes.

Portfolio strategist Adolfo Pena was promoted after five years with the company.