Man Group Takes Stake In Insurance-Based Fund

Jun 9 2008 | 10:48am ET

The Man Group has taken its second big stake in an alternative investment firm this year. The London-based firm has struck a deal to buy 25% of Nephila Capital, which focuses on insurance-based investments.

Man will pay US$50 million for the stake in Bermuda-based Nephila. The minority stake in the firm, which manages some US$2.4 billion, will be part of Man Environmental Capital Opportunities, the environmental private equity division it launched in April.

“This transaction further develops Man’s strategy to expand the range of opportunities for our investors,” Man chief Peter Clarke said. “The natural catastrophe and weather derivative markets offer significant opportunities for uncorrelated alternative investment returns.”

In addition to catastrophe bonds and weather derivatives, Nephila focuses on insurance-linked securities and insurance swaps, among other insurance-based instruments.

In March, Man paid $245 million for a 50% stake in New York-based credit hedge fund shop Ore Hill Partners.

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