Aeolus Capital Management raises funds to grow AUM 40%+ to $5.5bn

Aeolus Capital Management Ltd., the Bermuda based reinsurance and insurance-linked securities (ILS) investment fund manager, grew its assets under management considerably in time for the key January renewals, lifting the total by more than 40% to reach a new high of $5.5 billion.

When we last reported on the investment manager’s assets under management (AUM), Aeolus Capital Management had grown its asset base to $3.9 billion thanks to fresh investor client inflows in advance of the mid-year 2023 renewals.

Prior to that, back at the mid-point of 2022, Aeolus Capital Management’s AUM had been around the $3.5 billion mark.

Aeolus’ AUM then rose by more than 11% over the next year to reach $3.9 billion at July 2023 and now a more significant leap, as its assets have risen by over 40% to reach approximately $5.5 billion at January 2024.

This is a new all-time high AUM for Aeolus Capital Management, positioning the investment manager to capitalise on attractive underwriting opportunities at the recent renewals and future rounds of reinsurance and retrocession buying.

At $5.5 billion of assets under management, Aeolus Capital Management remains firmly within the top-10 of our ILS fund manager directory.

With Aeolus offering specialised collateralized reinsurance and retrocession products, we suspect this new capital will have been welcomed by its clients on the ceding company side.

Re/insurers have been looking to buy more protection, in reinsurance and retro form, and Aeolus’ product suite has likely been in-demand through the renewals, given the current market dynamic and the fact there have been some gaps that had appeared in recent years.

The market dynamic will have presented an opportunity for Aeolus to do more with its existing ceding company clients, while also attracting new ones.

On the investor side, we are told by sources that Aeolus’ strategies delivered attractive returns in 2023, so that has likely proved an attraction to those deploying new capital to the investment manager.

Aeolus’ strategies have tended to target the mid-to-higher end of where ILS fund target returns sit, but given the changes in the market and the structure of products and reinsurance or retro towers, the proposition in the current price environment looks even more attractive.

Recall, that we reported back in 2022 about the product restructuring and repositioning that had been undertaken by Aeolus Capital Management, as it looked to improve the terms of its contracts and better shape the potential portfolio returns for its investors.

We assume the performance in 2023 will have been assisted by these changes, while proving this out will have helped to encourage existing investors to perhaps allocate more capital, while also proving attractive to new investor clients at the same time.

View information on many dedicated ILS fund managers, as well as reinsurers offering ILS style investment opportunities, in our Insurance-Linked Securities Investment Managers & Funds Directory.