Hyperion valued at $5bn after HG Capital investment & debt raise

Global insurance and reinsurance intermediary and distributor holding company Hyperion Insurance Group Limited has raised a significant new haul of capital from a key private equity investor and through a private debt issuance, as it targets accelerated growth.

The private equity investor in question is HG Capital, a technology focused investor in service industries and software and also the company that just in recent days announced the sale of primary personal and commercial brokerage A-Plan to Howden, the broking arm of Hyperion.

Hyperion announced that the investment from HG now values the group at an enterprise value of around US $5 billion and that alongside an additional debt raise and existing resources, Hyperion has up to $1.5 billion available to “accelerate its growth with both selective acquisitions and investments in data and technology.”

For a challenger broker with ambitions to grow, both in insurance and reinsurance, that’s a useful pot to attract talent and continue to roll-out new analytics and data services to help it win business, attract and retain clients.

HG will sit as a key investor in Hyperion, alongside existing investors General Atlantic and Canadian pension CDPQ, both of whom remain committed, the company said.

The Hyperion management team and the firms employees continue to be the largest shareholder group in the company though, with more than 1,000 individuals now owning shares.

“The transaction establishes a sustainable, long-term capital model with core employee ownership supported by collaborative investment partners, enabling Hyperion to build out Howden as a leading international challenger broker and DUAL as an international specialist MGA,” the company said.

Hyperion employs some 9,000 or so people and manages around $9 billion of gross written premium on behalf of its clients.

It’s differentiated approach to brokerage and intermediation, alongside its aggressive desire to grow in both insurance and reinsurance, plus to take advantage of synergies around its MGA businesses, make Hyperion an interesting prospect in a market where innovation, technology and diverse capital sources are key to lowering frictional costs and making client relationships more sticky.

The group expects that new investor HG’s expertise in software, data and technology will benefit its Hyperion X unit, the digital, data and analytics business.

Hyperion has a growing reinsurance practice with expertise across collateralised market placements, which was under RKH Reinsurance Brokers branding but will fall under Howden soon. This investment should help the company to expand its reinsurance ambitions further, while recognising synergies through use of technology and in the way it helps clients access risk capital.

David Howden, Chief Executive Officer of Hyperion, commented, “I am thrilled to welcome Hg as a long-term partner. During our conversations on A-Plan Group it was clear that Hg and Hyperion share an understanding of what building a business to last means for employees and clients. This, the quality of the Hg team, their support for our core employee ownership and our culture of empowerment, and the desire of the Hg partners to contribute to our digital and data strategy, makes them an excellent partner to join General Atlantic and CDPQ as we continue our journey.”

Andrew Land, Partner at Hg, said, “It is a privilege for Hg to back David and his fantastic team through this investment in Hyperion. The company is a unique and special business, driven by its outstanding culture and quality of talent, and it has a significant growth opportunity across the global insurance sector in the coming years. We got to know David during the recent sale by Hg of A-Plan Group to Hyperion, and it became clear that our long-term investment approach and specialism in technology were a great match for him and his team. In addition to providing capital, Hg’s deep knowledge of software and data will help Hyperion stay at the forefront of technology adoption across the insurance sector.”

Nic Humphries, Senior Partner at Hg, added, “This long-term investment in Hyperion reflects Hg Saturn’s strategy of backing entrepreneur-led growth businesses in software and tech-enabled services that are sector champions. In Saturn’s recent investments in Visma, P&I, Argus Media, Sovos and now Hyperion, we developed a trusted relationship with the founder or CEO over a long period, enabling us to offer them the investment structure they needed to meet their long-term plans. David and his team have built one of the global leaders in insurance distribution and we are excited in supporting them for many years to come.”

Dominic Collins, Chairman of Hyperion, also said, “I am delighted that Hg have chosen to become a partner alongside General Atlantic and CDPQ. It is a privilege to work with three partners who embrace our core ambition to build a sustainable and successful business, and who will help us to deliver on our strategy over the coming years at this very exciting time in the industry. The Hg team bring not only significant capital, but also considerable expertise and I look forward to welcoming them to the Board.”