Ardonagh gets major investment from PE funds, ADIA & institutions

The Ardonagh Group, a UK headquartered independent insurance broking, underwriting, servicing and management company and the owner of reinsurance broker Inver Re, has secured a major investment that values the firm at $7.5 billion.

The institutional quality of the investment backing is a vote of confidence in the broking platform Ardonagh is building out, especially since its acquisition of the BGC insurance and reinsurance broking operations, including Corant Global and now its build-out of the Inver Re platform as well.

The company this morning announced a significant new equity investment, led by existing long-term shareholders Madison Dearborn Partners, LLC and HPS Investment Partners, alongside new co-investors via accounts managed by MDP and HPS, that include a wholly owned subsidiary of the Abu Dhabi Investment Authority (ADIA), and a number of other large global institutions.

The Abu Dhabi Investment Authority (ADIA) has been expanding its interests in insurance and reinsurance of late, both on a private equity basis and through its insurance-linked securities (ILS) portfolio.

Funds under the management of Madison Dearborn Partners, LLC and HPS Investment Partners will both increased their shareholding in Ardonagh and HPS will also reinvest in the Group.

The co-investors, including the ADIA subsidiary and other large global institutions, are set to acquire more than $1 billion in equity as part of the transaction, which values Ardonagh at $7.5 billion.

David Ross, Group CEO, commented on the news, “The recommitment of both HPS and MDP continues a partnership that has helped Ardonagh grow into an international broking powerhouse. Continuity of ownership after six years is the optimum outcome for us, allowing management to focus solely on the execution of our strategy and the preservation of the unique Ardonagh culture. We are also delighted to welcome HPS and MDP co-investors to the Group. Their global, long-term ambitions are perfectly aligned with our own and those of our other shareholders, securing our goal of being a private enterprise for years to come. Today is a major milestone in Ardonagh’s journey and the achievement belongs to our greatest asset – every one of our people.”

Ardonagh has become a top 20 global insurance broker, placing $13 billion of premiums across its business and across the full spectrum of insurance and reinsurance risks.

With 8,000 employees across 100 locations the company continues to grow as well, especially through its acquisitions.

At September 30th 2021, Ardonagh’s income over the last twelve months was $1.5 billion, while adjusted EBITDA reached $530 million.

Vahe Dombalagian, Managing Director and Co-Head of the MDP Financial & Transaction Services team, said, “We have supported Ardonagh since the formation of the Group and in that time, we’ve witnessed tremendous growth and diversification. Ardonagh has ample opportunity to continue to build on its platform and increase its reach and profitability, and by increasing our investment today we are reaffirming our commitment to continue supporting those efforts. We are proud to be a key shareholder behind the Ardonagh workforce and look forward to our continued partnership, alongside HPS and our and their new co-investors.”

Scot French, Governing Partner of HPS, added, “Throughout our multi-year relationship dating back to their first day at the Group, we have steadfastly supported the Ardonagh leadership team’s vision to build a best-in-class, global insurance brokerage platform. We are excited to remain meaningful investors in the Group as they continue to execute on their growth strategy.”

Hamad Al Dhaheri, Executive Director, Private Equities Department, ADIA, also commented, “We are pleased to partner with Ardonagh, alongside HPS and MDP, to support its strong management team in executing its global growth strategy. This investment continues to build on our strategy and track record of investing in market-leading businesses across the insurance industry value chain.”