This is a slideshare about Nephilia Capital - a Natural Disaster Investment Firm. This presentations shares the companies history, goals, about, recent press (including Oregon and KKR's investments) and more.
Nephila Capital’s Background• Nephila Capital Limited was founded in 1997 in London, England.• It is a part of Willis Limited, which at the time was the world’s 3rd largest reinsurance broker.• In 1999 they relocated to Bermuda. The reasoning behind this was to establish a local presence.
About• Nephila Capital is an owned subsidiary of Nephila Holdings Limited and is a Bermuda domiciled company.• What Nephila does is act as an investment advisor for client account.• In 2010 Nephila Holdings established Nephila Advisors LLC in the US. This was done to support Nephila in investor relations and business development.
Nephila in the Press – Oregon Invests $100 Million• An investment council in Tigard, Oregon pledged $100 million to Nephila funds in December of 2011.• This money is being used for the Juniper fund, which is one of the higher risk contracts, and the Palmetto fund, which is one of the lower risk funds.
KKR Buys a 24.9% Stake in Nephila• On January 24, 2013, KKR announced that they have taken a 24.9% stake in Nephila Capital.• The deal was closed the 23rd, but no further details have been released to the press.
Their Investment Philosophy & Objectives• Nephila Capital’s philosophy is, “based on the premise that institutional investors are attracted to the non-correlated, relatively high-yielding returns offered by insurance linked instruments.”• Nephila’s objective is to, “provide investors with superior returns in an asset class which is uncorrelated with the traditional financial market. We augment the attractive natural characteristics of a non-correlated positive expected return (“exotic beta”) with a comprehensive analytical overlay, market relationships and experience to create additional expected return (“alpha”). To that end, our philosophy focuses on the importance of portfolio construction – both at a macro level (allocation to this asset class within an institutional investment portfolio) and at an operational level (careful and systematic selection of risks to arrive at an optimal portfolio given investor preferences).” Source
Research• Risk assessment research, “focuses on issues such as the parameterization of natural catastrophes and exposure management. We conduct ongoing research on subjects relating to our industry and portfolios, which we make available to investors through our secure website. Our broad portfolio team has expertise which spans both the quantitative side of the risk modeling as well as the reinsurance underwriting component. In addition to our internal resources, Nephila maintains relationships with various third party experts (primarily leading academics in the fields of finance, oceanography, weather or he study of hurricanes) who conduct additional research into specific problems on our behalf.”• Market dynamics research, “focuses on the various pressures affecting the participants in the traditional reinsurance, catastrophe bond and Industry Loss Warranty (ILW) markets. As a consequence of our position as the leading manager in our space, as well as our well-established position in the reinsurance market, we have access to a wealth of information that is not easily accessible to new market entrants or more casual market participants. This information is harnessed internally and used to develop strategies and identify trends in the various markets.”• Portfolio construction research, “has focused on relative value among catastrophe market sectors (e.g. traditional reinsurance, retrocession, ILWs, or cat bonds), with an emphasis on matching portfolio risk return parameters with investor appetite and expectations. We have conducted extensive research into quantifying investor preferences and can provide custom solutions to our investors in the context of their overall investment profile.” Source