Financial services firm Hub International Ltd. was valued at $29 billion for a $1.6 billion equity investment led by T. Rowe Price Investment Management Inc., multi-asset investment manager Alpha Wave Global L.P. and Singapore-based, state-owned Temasek Holdings Ltd, with participation from new, unspecified investors. The transaction is set to close in May.
The private equity-backed broker has seen its valuation climb from $4.4 billion in 2013, when it was acquired by private equity firm Hellman & Friedman LLC. In 2018, Altas Partners acquired a minority stake in Hub, valuing the firm at $23 billion. Hub was also valued at about $23 billion in 2023, following a minority investment from Leonard Green & Partners.
Hub provides employee and retirement benefits, such as plan governance consulting, fiduciary investment reviews, provider analysis and employee engagement for 401(k), employee stock ownership, defined benefit, 409A, 403(b) and 457(b) plans.
Insurance brokers, intermediaries between insurance firms and clients, have seen increasing interest and investment from private equity firms, a result of higher insurance premiums and revenue growth. Hub’s annual revenue, for example, increased to $4.9 billion in 2024 from $1.1 billion in 2013.
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Prominent recent deals include KKR & Co.’s acquisition of a majority stake in USI Insurance Services and Stone Point Capital’s minority stake in Truist Insurance Solutions.
According to Oliver Wyman, the number of private equity deals for managing general agents and brokers peaked in 2021 at 1,066 and fell to 543 in 2023. According to the consulting firm, the number of buyers for these assets is shrinking, because most large private equity firms already own insurance brokerage assets.
To ensure liquidity for current shareholders, Hub will provide investors with liquid private placements in connection with Leonard Green’s 2023 investment.
“Lack of selling appetite allowed the investment proceeds to provide primary capital for growth initiatives and other general corporate purposes, such as acquisitions, debt repayments, and maintaining excess cash on Hub’s balance sheet,” Hub stated in the announcement.
Oliver Wyman noted that it expects price competition and consolidations in the industry to increase, with sponsors that are able to operate an efficient and well-integrated brokerage likely to be rewarded by the market.
“We believe that the market will disproportionately reward consolidators that deliver well-integrated and operationally efficient insurance brokerages,” Matt Leonard, a partner in Oliver Wyman, wrote in a 2024 report.
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Tags: Alpha Wave Global, Hub International Limited, T. Rowe Price Investment Management, Temasek
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