Insurance-focused PE house could strike deal within three months

Specialist private equity house BP Marsh is close to investing in a London-based insurance firm, according to chairman Brian Marsh.

The company, which netted £29.2m from selling its stake in broking group Hyperion to General Atlantic last year, also has a further six possible deals in the pipeline, and expects the soft market to present more opportunities to invest in start-ups.

BP Marsh specialises in providing start-up or early-stage capital to financial services companies, and has a number of insurance brokers on its portfolio, including London broker Besso.

Speaking to Insurance Times following the release of BP Marsh’s results, Marsh said: “There is every likelihood that we will be making one more investment in the London insurance market this year.

“I think that will complete in the next three months or so.”

The company’s new business department is looking at a further six potential investments, but Marsh said it was difficult to tell whether these would complete.

He added that the company had “no shortage” of enquiries, and that there was potential for more broking start-ups as larger brokers felt the pinch of the soft market and started cutting costs.

He said: “In those circumstances the situation becomes quite unsettled for various personnel in various areas of those businesses. That is the stage at which they start looking around and saying ‘do I have to put up with this?’”

Although BP Marsh wants to reinvest the money it made from selling its Hyperion stake, which accounted for 67.3% of its portfolio, Marsh said the company was not looking to replace Hyperion with another large investment.

“We would be reluctant to invest more than £3m on any new venture,” he said.