Fixed income financial services focused investment firm Cohen & Company, LLC is back with another insurance, reinsurance and insurtech focused Special Purpose Acquisition Company, a blank check company or SPAC, with a $253 million target for INSU Acquisition Corp. IV.
Once again, the investment manager has an insurance and reinsurance focus for its latest Special Purpose Acquisition Company (SPAC) venture, and the Cohen & Co vehicle has John Butler, former Managing Partner at insurance-linked securities (ILS) investment specialist Twelve Capital and who joined Cohen & Co. in 2017, as its President and CEO.
Cohen & Co has been active in the SPAC capital raising space for a number of years, with its first SPAC with an insurance, reinsurance and insurtech remit launched in early 2019.
Since then the investment manager has successfully raised three SPAC vehicles, with the most recent seeing the firm securing an upsized $250 million initial public offering (IPO) for INSU Acquisition Corp. III.
Insurance Acquisition Corp. (IAC) was the first Cohen & Co. SPAC focused on reinsurance and it eventually raised almost $151 million and then entered into a combination transaction with automotive e-commerce firm, Shift Technologies Inc.
This was quickly followed by INSU Acquisition Corp. II, around the middle of 2020, and that second insurance and reinsurance focused SPAC vehicle eventually raised $230 million including exercised over-allotment options.
The second re/insurance SPAC from Cohen & Co. then entered into a high-profile combination with insurtech Metromile, taking the company public in the process in a deal that gave Metromile a pro forma enterprise value at closing of $956 million and a pro-forma market cap of $1.3 billion.
That third SPAC vehicle has yet to announce an acquisition or merger with an insurance, reinsurance, insurtech, or related company, but already Cohen & Co. is onto its fourth SPAC.
INSU Acquisition Corp. IV will look to raise $253 million including overallotments for the underwriters, which will again then be put to work in a transaction with a business in insurance, reinsurance, or insurance technology related sectors.
“We currently intend to concentrate our efforts on identifying businesses providing insurance or insurance related services, with particular emphasis on insurance distribution businesses, regulated insurance or reinsurance businesses, and insurance related technology businesses. We are not, however, required to complete our initial business combination with an insurance business. While we may pursue a business combination outside of that industry, we believe a focus on the insurance sector best combines the expertise and experience of our management team with a sector that offers attractive investment opportunities,” the new company explained.
A flurry of SPAC vehicles focused on the insurance and reinsurance market have emerged in the last six months, including a SPAC named Kairos launched with the backing of ILS fund manager Hudson Structured Capital Management.
So far, Cohen & Co. is the only sponsor of insurance or reinsurance focused SPAC’s to effect a transaction within these markets, with its Metromile deal.
These special purpose acquisition companies (SPAC), or blank check investment vehicles, are an attractive proposition for investors at this time, giving them a way to back managers with specific insurance and reinsurance sector expertise on unknown acquisitions and combinations that could return significant multiples.
The listing makes the investment opportunity even more compelling for some, given the potential liquidity options it provides as well.
SPAC’s also present a lower-friction way to go public, being a much simpler route than a full IPO listing in the traditional manner.
Now, for Cohen & Co., still with a third SPAC looking for an acquisition, this fourth will bring fresh capital to deploy as it continues building this innovative pipeline of returns for its investors.