Man Group today announced it has agreed to acquire a 25% stake in Nephila Capital Ltd., an alternative investment manager specializing in insurance-based instruments such as insurance linked securities, catastrophe bonds, insurance swaps and weather derivatives.

Established in 1998, Nephila is headquartered in Bermuda, employs 25 staff members and has approximately $2.4 billion under management. By Combining Nephila’s experience with its own depth of resources and market reach, Man says the deal will create significant value for both investors and shareholders.

The deal is part of Man’s strategy to broaden its offering of alternative investment strategies and sources of uncorrelated returns offered to institutional investors.

The minority stake in Nephila Capital will be part of Man ECO, a multi-strategy private equity manager which seeks to capitalize on investment opportunities arising from environmental strategies. Nephila’s three managing principals, Frank Majors and Greg Hagood, who are co-founders of the firm, and Barney Schauble, will continue to manage the business and the underlying fund investments.

“This transaction further develops Man’s strategy to expand the range of opportunities for our investors. The natural catastrophe and weather derivative markets offer significant opportunities for uncorrelated alternative investment returns. We are excited at the prospects of this strategic partnership and what it means for our and Nephila’s investors,” stated Peter Clarke, CEO of Man Group.