Nephila Capital attracted around $340 million from 11 UK institutions into its catastrophe reinsurance fund in the second half of 2009.

The company is an investment manager specialising in insurance-linked securities such as catastrophe bonds.

Nephila now has a total of $2.6 billion in assets under management, according to a report by Hedge Funds Review.

Investors who put their money into catastrophe bonds get an attractive rate of return, unless a payout is triggered by a prespecified sum in insured losses related to a particular risk — such as a Florida hurricane or a California earthquake.

The downside is that investors can be wiped out if the catastrophe occurs.

Catastrophe bonds are tied to specific risks and not to any asset values, meaning they are not correlated with global financial markets — a useful selling point after market mayhem during the global financial crisis.

"Insurance payouts for damages caused by hurricanes Gustav and Ike and the heavy investment losses and liquidity constraints brought about by the financial crisis have led to a major market shake out," Greg Hagood, co-founder of Nephila, said.

"Remaining participants, such as Nephila, have therefore been able to capitalise on this opportunity and charge higher catastrophe premiums."

Nephila has bolstered its senior management team with the appointment of two new partners, Steve Glassman and Adolfo Pena, who will help support the ongoing growth of the business.

Mr. Glassman joined on 1 February 2010 as a managing partner after more than 20 years with Merrill Lynch. He will focus on strategy, product structuring and the management of human resources and business processes.

Mr. Pena, a portfolio strategist and seismic and financial engineer, joined Nephila in 2005. He will continue to co-manage the portfolio management and analytics group.