Specialty insurer Markel Corp. will acquire Nephila Holdings, a standalone insurance-linked securities manager.

Plans call for closing the deal, pending regulatory approvals, in the 2018 fourth quarter. Neither side disclosed financial terms, though the transaction is not subject to any financing condition and Markel plans to use existing cash on hand.

In Nephila, Markel will be acquiring a company with more than $12 billion of assets under management for over 300 investors. Its revenue is primarily from management and incentive fees.

Richie Whitt, Markel’s co-chief executive officer, said the addition of Nephila to Markel’s insurance, reinsurance, InsurTech, fronting and existing insurance-linked securities capabilities “will enhance and strengthen the breadth and depth of Markel’s offerings to policyholders, producers and investors.”

Once the acquisition closes, the combined assets under management between Nephila and Markel will stand at about $19 billion, representing approximately 20 percent of the insurance-linked securities sector, according to the announcement.

A.M. Best, in an early assessment of the deal announcement, noted that the acquisition will give Markel “a dominant position in the insurance-linked securities market.”

Nephila will continue to operate as a separate business unit. The management team, led by Greg Hagood and Frank Majors, will remain in place and will continue to be based in Bermuda, San Francisco, Nashville and London.

Nephila offers investment products focusing on instruments including insurance-linked securities, catastrophe bonds, insurance swaps and weather derivatives. Nephila has been managing institutional assets in this space since it was founded in 1998. The firm has 180 employees.

Sources: Markel, A.M. Best

*A version of this story ran previously in our sister publication Insurance Journal.