Insurance and reinsurance broking group BMS is taking a major capital injection thanks to new investments from institutions that value the brokerage at UK £500 million (US $636m).
The investment is coming from affiliates of Canadian pension fund British Columbia Investment Management Corporation (BCI) and private equity investors Preservation Capital Partners (PCP), in a deal that is expected to close in the third-quarter of this year.
The British Columbia Investment Management Corporation (BCI) is among the larger end of Canadian pension funds, many of which have already demonstrated their appetites for investing in the reinsurance and risk sector. It manages approximately CA $146 billion of assets on behalf of British Columbia’s public sector.
Preservation Capital Partners (PCP) is a private equity investor that specialises in the financial services sector, typically preferring to invest alongside management teams and providing growth stage capital.
BMS said that the firms management team, led by CEO Nick Cook, are set to keep their current roles following completion of the investment, and that the management and staff of BMS will remain significant shareholders in the company.
After the completion of this transaction, Pioneer Underwriters will be owned directly by the current shareholders of Minova Insurance, the holding company that had previously been the main stakeholder in BMS.
It’s been reported that BMS aims to significantly grow its footprint in reinsurance after this investments, which we understand is as the firm sees an opportunity at this time to capitalise on some of the fallout of sector M&A that has resulted in a chance to move into new areas and take market share.
BMS already has a strong team delivering reinsurance broking, that interface with the collateralised and ILS fund markets as well.
The growth capital this investment provides will help to propel the brokerage further and provide a platform for building out its specialisms even further.
Nick Cook commented on the news, “The long-term investment by BCI and PCP secures our future as an independent broker and maintains significant employee ownership. We have grown consistently over the past 5 years generating revenues in excess of £100m for the first time in 2018. We look forward to partnering with BCI and PCP as we continue to invest in our business and attract market leading talent to the benefit of our clients. My thanks go to all of our colleagues who have been at the root of our success.”
Dane Douetil, CEO of Minova added, “This investment is excellent news for BMS’s dedicated staff, who will remain important shareholders, and particularly for BMS clients who will continue to benefit from the very best independent advice in the market. It is also a ringing endorsement of the London market and, following considerable consolidation in the broking sector, ensures that an independent voice will continue to be heard.”
Gordon J. Fyfe, CEO/CIO of BCI, also said, “As an investor of patient capital, we seek companies with a sustainable competitive advantage that offer value-add services and are led by talented management teams. BCI’s long-term investment in BMS allows them to grow the business and generate the returns that our pension plan and accident fund clients require. Our investment also provides regional and sector diversity to our clients’ private equity portfolio.”
Jatender Aujla, a Partner of Preservation Capital, further explained, “We have been impressed by the growth BMS has experienced since Nick and his management team took over the business. Today, BMS is one of the largest independent specialty lines focused insurance brokers in the London market. We look forward to working with the team as long term partners and helping them seize the significant opportunities available in the market.”
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