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Aeolus Re Stage: Growth Year of Investment: 7/2006
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Aeolus Re is a start-up Bermuda reinsurer founded by Peter Appel (former President and C.E.O. of Arch Capital) and David Eklund (former President and Chief Underwriting Officer of Renaissance Re). The company operates as an unrated reinsurance platform targeting the property catastrophe segment of the worldwide reinsurance market. Specifically, Aeolus focuses on the industry loss warranty ("ILW") segment of the market. WP’s investment thesis in Aeolus is predicated on backing a highly successful and experienced management team to capitalize on an attractive market opportunity caused by the severe 2004 and 2005 hurricane seasons, and compounded by significant increases in industry capital requirements due to rating agency and catastrophe model changes. Aeolus offers insurance companies a means to reduce risk in peak exposure zones and manage capital more effectively. As an unrated vehicle, Aeolus has significant flexibility and capital management advantages over other rated competitors. Joining Warburg Pincus in its investment are management and Arch Capital Group Ltd.
